ORDER
Sikander Khan, A.M.
1. These three appeals by the assessee are interconnected involving common grounds. For the sake of convenience, they are considered together and decided by this consolidated order.
2. WTA No. 1225/Del/1990.- (Assessment year : 1989-90) :
The original assessment for the assessment year 1989-90 was completed in this case on 27-3-1992 wherein the Assessing Officer added the value of the land and the building as per valuation adopted in the assessment year 1987-88 at Rs. 27 lakhs and Rs. 10 lakhs respectively. The said land and the building had been leased out by the assessee to M/s R. Narain Dyeing and Printing Mills (Pvt.) Ltd.
3. In the first appeal it was contended before the Ld. CWT(A) that the inclusion of the value of the aforesaid land and building in the total wealth of the asses see-company was unjustified because they were exempt in terms of clause (vi) of sub-section (3) of section 40 of Finance Act, 1983. In the alternative, it was contended that the value taken by the Assessing Officer was excessive.
4. The Ld. CWT(A) did not decide the aforesaid issues. He, however, found that the assessee had leased out another 1/3 portion of the remaining building, machinery of his business as such to M/s Nishan Embroidery & Knitting Co. Ltd. on monthly rent of Rs. 40,000 which fact had neither been disclosed by the assessee before the Assesssing Officer nor the Assesssing Officer had considered and included in the value of the same in the total wealth for the assessment year 1989-90. The Ld. CWT(A) therefore issued a show cause notice for enhancement of the assessee company’s net wealth. In reply, it was contended that since the matter was not on record before the Assessing Officer and the Assessing Officer had not examined the same, it could not be taken up by the Ld. CWT(A) for enhancement. Reliance was placed on the decision in CITv. Shapoorji Pallonji Mistry [1962] 44 ITR 891 (SC) and CIT v. Rai Bahadur Hardutroy Motital Chamaria [1967] 66 ITR 443 (SC). Considering these submissions and contentions, the Ld. CWT(A) had dropped the notice of enhancement but he refrained from deciding the grounds raised by the assessee in its appeal before him regarding the inclusion of the value of the land and the building as mentioned above. He set aside the impugned assessment and restored the same to the Assessing Officer to be made afresh de tiovo after considering all these facts of the case including the question of leasing out of the aforesaid assets to M/s Nishan Embroidery & Knitting Co. Ltd.
5. Aggrieved by the aforesaid order of the Ld. CWT(A) the assessee has come up in second appeal before this Tribunal.
6. The Ld. counsel for the assessee submitted before us that the Ld. CWT(A) should have decided the grounds of appeals before him as mentioned above and he was not competent to set aside the assessment and restored the matter to the Assessing Officer on the ground of detection by him of the leasing out of assets to M/s Nishan Embroidery & Knitting Mills Ltd. He further submitted that the grounds relating to the inclusion of the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. had been adjudicated by the IT AT Delhi Bench ‘D’ in WTA Nos. 675 & 763/Del./1992 for assessment year
1987-88 in assessee’s own case vide order dated 12-2-1999 and therefore the similar grounds involved in the present appeal should now be decided in respect of assessment year 1989-90 covered under the present appeal in the light of the said order of the ITAT.
7. The learned counsel further submitted that the Ld. CWT(A) was not justified in issuing the enhancement notice in respect of leasing out of the asset to M/s Nishan Embroidery & Knitting Mills Ltd. He added that after being satisfied about lack of power of enhancement on the facts and in the circumstances of the case as mentioned above, he had dropped the enhancement notice and then he was not justified in selling aside the assessment and restoring the same to the Assessing Officer. He contended that the Ld. CWT(A)’s action was not proper and valid.
8. The Ld. DR on the other hand supported the order of the Ld. CWT(A).
9. We have considered the materials on the file and the submissions of the rival parties. We find that the Assessing Officer had already passed fresh order for assessment year 1989-90 after the impugned assessment was set aside by the Ld. CWT(A). Vide Assessing Officer’s fresh order dated 30-4-1993, consequently the impugned assessment covered under the present appeal had become infructuous.
We also find that the Ld. CWT(A) in the impugned appellate order had not given definite finding with regard to the inclusion of the value of the assets leased out to M/s Nishan Embroidery & Knitting Mills Ltd. and he had not enhanced the net wealth of the assessee-company for the assessment year in question.
Thus there was no enhancement of the net wealth of the assessee by the impugned appellate order of the Ld. CWT(A). As regards the setting aside of the assessment order we are of the view that the order of the Ld. CWT(A) could not be declared as improper or invalid on this ground. It is an admitted fact that the Ld. CWT(A) had detected the leasing out of the assets to M/s Nishan Embroidery & Knitting Mills Ltd. which had not been considered by the Assessing Officer in the impugned assessment order. This matter calls for proper consideration and verification with regard to its includibility in the total wealth and with regard to the determination of its value. The assessee’s submissions and contentions also had to be considered by the Assessing Officer before deciding the issue. It was, therefore, quite fair and just on the part of the Ld. CWT(A) to set aside and restore the matter to the Assessing Officer for fresh order. He had given an office note in the appellate order stating the reasons why the assessment had been set aside. He had recorded that he wanted to enable the Assessing Officer to consider the assessability to wealth-tax of the assets leased to M/s Nishan Embroidery & Knitting Mills Ltd. and consequently not to bind the Assessing Officer in regard to determining the fail- market value of the land and the building transferred to M/s R. Narain Dyeing & Printing Mills Ltd. These reasons given by the Ld. CWT(A) in the office note appear to be clear expression of his fairness and justness in the case.It may be mentioned here that the impugned appellate order was passed on 11-11-1992, i.e., long before the order of the ITAT dated 12-2-1999, in the assessment year 1987-88 in the assessee’s own case was passed.
10. Now that the aforesaid order of the ITAT in assessment year 1987-88 is available. The Ld. CWT(A) can decide the grounds taken in appeal before him in respect of the additions for the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. This can be done by the Ld. CWT(A) in the impugned order for assessment year 1989-90 is set aside and restored to him but there is no need for this in the present appeal because as stated above, the Assessing Officer had already passed fresh order after Ld. CWT(A) had set aside the original assessment order and that the appeal had been filed against the fresh assessment order and decided by the Ld. CWT(A). Against the second appellate order for the assessment year 1989-90 and second appeal before this Tribunal has been filed, which is being considered below and where we arc directing the Ld. CWT(A) to decide the assessee’s grounds of appeal relating to inclusion of the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. in the light of the ITAT order passed on 12-2-1999 in the assessment year 1987-88 in the assessee’s own case referred to above.
11. So far as the present appeal by the asscssee is concerned, we are dismissing the same without prejudice to the grounds taken in the other appeal for assessment year 1989-90 considered below.
12. WTA No. 200/Del/1997: (Assessment year: 1989-90) :
This appeal is also for the assessment year 1989-90 but it is directed against the second order of the Ld. CWT(A) passed on 7-2-1997 against the fresh assessment order dated 30-4-1993. As per setting aside order dated 11-11-1992 of the Ld. CWT(A) referred to above, the Assessing Officer passed fresh assessment order dated 30-4-1993 in which he took the value of the land leased out to the subsidiary company at Rs. 76,27,500 on the basis of DVO’s report as against the value of Rs. 27 lakhs taken in the original assessment order as mentioned above. He took the value of the building leased out at Rs. 3,60,000 as against Rs. 10 lakhs taken in the original assessment order referred to above. The Assessing Officer however did not consider and include any value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. on the basis of the observations and directions of the Ld. CWT(A).
13. Aggrieved by the aforesaid value taken by the Assessing Officer, the assessce preferred first appeal before the Ld. CWT(A) against the fresh assessment order. The Ld. CWT(A) found that the Assessing Officer had not considered and included the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. in the light of the observations and directions of the Ld. CWT(A) as above. He observed that this was wrong on the part of the Assessing Officer and consequently the assessee’s wealth to that extent had been under assessed. He added that the Assessing Officer had probably come to the conclusion that the assets transferred to M/s Nishan Embroidery & Knitting Mills Ltd. were business assets and therefore they were not includible in the total wealth of the assessee-company. He observed that this view of the Assessing Officer was wrong because in assessment years 1987-88 and 1988-89 it had been held by his predecessor in office that the leasing out of the property was not the object of the company and the value of the property leased out has to be included in the total wealth of the assessee-company. He added that it was for this reason that the Assessing Officer had included the value of the land leased out to M/s R. Narain Dyeing & Printing Mills Ltd. in the total wealth of the assessee.
14. In view of the aforesaid facts of the case, the Ld. CWT(A) again set aside the impugned fresh assessment and did not decide the issue relating to the addition for the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Co. as above.
15. Aggrieved the assessee has come up in second appeal before this Tribunal.
16. The learned counsel submitted that the setting aside of the impugned fresh assessment order was unjustified and wrong. He further submitted that the Ld. C WT(A) should have given his decision on the value of the land and the building leased to M/s R. Narain Dyeing & Printing Mills Co. Ltd. as per the grounds of appeal taken before him. As regards the question of inclusion of the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. he submitted that the Assessing Officer was of the view that they were business assets and as such not includible in the total wealth and therefore he did not add their value to the total wealth. He contended that the Assessing Officer was not duty bound to add the value of these assets after setting aside of the original assessment order by the Ld. CWT(A). He added that the Ld. CWT(A) in the impugned appellate order had given his finding that the view of the Assessing Officer in this regard was wrong and that the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. was includible in the total net wealth without giving proper notice of enhancement to the assessee. He added that this finding of the Ld. CWT(A) amounted to enhancement because he had directed the Assessing Officer to determine the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. and include the same in the total wealth. This clearly amounted to enhancement. He argued that such direction could not have been given by the Ld. CWT(A) without notice of enhancement as required under the law. He, therefore, contended that the impugned order of the Ld. CWT(A) was not proper and valid and the same deserved to be set aside.
17. The learned counsel finally submitted that in the interest of justice and fair play and for the purpose of avoiding prolonged litigation and for expeditious conclusion of the case, the order of the Ld. CWT(A) should be set aside and restored to him with the direction to decide the issue relating to valuation of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. in the light of the ITAT order in appeal for assessment year 1987-88 referred to above and further to give notice of enhancement and follow the due procedure of law regarding the inclusion of the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd.
18. The Ld. DR on the other hand, supported the order of the Ld. CWT(A).
19. We have considered the aforesaid facts and circumstances of the case and the materials on the file and the submissions of the rival parties. We are of the view that the Ld. CWT(A) could have decided the grounds of appeal before him relating to the addition for the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. Now that the ITAT order in assessment year 1987-88 on similar issue is available for guidance, he should decide the grounds of appeals taken by the assessee before him. For this, the impugned appellate order has to be set aside and restored to the Ld. CWT(A).
20. As regards the question of inclusion of value of asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. We arc of the view that since the Ld. CWT(A) has given his definite finding that the same was liable to be included in the total wealth, it amounted to enhancement of the assessment. He had set aside the assessment and restored it to the Assessing Officer for determining the value of the assets to be included in the total wealth. Since the impugned order of the Ld. CWT(A) resulted into enhancement he should have done this after giving notice of enhancement as per law. The Ld. counsel in the course of hearing before us pleaded that the Ld. CWT(A) could issue the notice of enhancement and follow the procedure and restored to him for deciding the assessee’s appeal afresh in all these grounds.
21. On the facts and circumstances of the case, therefore, we set aside the order of the Ld. CWT(A) and restore the case to him. He is directed to decide all the grounds of appeals taken by the assessee before him and also issue the enhancement notice with regard to the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. and decide this matter after hearing the assessee afresh as per law.
22. WTA No. 201/Del/1997 (Assessment Year : 1990-91) :
The issues involved in this appeal of the assessee are identical to those in the appeal for the assessment year 1989-90 considered above. The Assessing Officer took the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. at Rs. 76,27,500 and Rs. 3,50,000 as in assessment year 1989-90 referred to above. He did not add the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills as was done by him in the assessment year 1989-90.
23. In the first appeal, the assessee contested the value of the land and the building leased out to M/s R. Narain Dyeing & Printing Mills Ltd. as taken by the Assessing Officer.
24. The Ld. CWT(A) however, did not decide the issue relating to the value of these lands and buildings. He set aside the assessment and restored the mailer to the Assessing Officer for determining the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. as per appellate order in appeal for assessment year 1989-90 referred to above. He observed that the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. had to be added to the assessee’s wealth.
25. Aggrieved the assessee has come up in second appeal before this Tribunal.
26. We have considered the materials on the file and heard the Ld. ARs of both the parties in dispute. The issues involved in the appeal for the assessment year 1990-91 are identical to those in assessment year 1989-90. We, therefore, set aside the order of the Ld. CWT(A) for the assessment year 1990-91 and restore the case to him for deciding the assessee’s grounds of appeals relating to the addition for the value of the land and the building leased out to M/s P.. Narain Dyeing & Printing Mills Ltd. and to issue notice of enhancement in respect of the inclusion of the value of the asset leased out to M/s Nishan Embroidery & Knitting Mills Ltd. and then to give definite finding after hearing the assessee in the matter.
27. In the result, ITA No. 1225/Del. 1990 is treated as dismissed and the other two appeals are treated as allowed for statistical purposes.