P L D 1967 Karachi 556 (PLP)

WAHIDUDDIN AHMED, J

‑This is a reference under section 59‑A of the Estate Duty Act. It has arisen in the following circumstances. The accountable person is a widow of the late Jehangir Rustomji Sukhia who died on the 1st October 1958. The value of his assets was declared under section 58‑A at Rs. 2,43,379 which was not accepted. The Controller of Estate Duty assessed the value of the total assets at Rs. 5,44,

584. This amount included a sum of Rs. 4,62,000 which was assessed as the value of the property at Clifton area as against the declared figure of Rs. 2,00,000 for it. The Controller of Estate Duty did not accept the declared version of Rs. 2,15,324 assessed by Messrs D. H. Daruvala & Co. Architects and Engineers. He found that the house at Clifton was constructed in 1950; and its net annual letting value was fixed at Rs. 15,400 after allowing for taxes and ground rent, etc. as it was in occupation of a tenant. The learned Controller assessed the price of the property under section 38 of the Estate Duty Act at 30 times of its annual rental value. This order was challenged before the Income‑tax Appellate Tribunal, Karachi. The accountable person asked the Tribunal to refer the matter of correct price to the valuer under sec tion 59(4). The Tribunal appointed one Mr. A. A. Solangi for this purpose who valued the property at Rs. 2,26,

500. This figure was arrived at as the mean between the computation made on the basis of the rental income as well as the estimated value of its structure. The Department contested this valuation of the pro perty in the Clifton area at the material time. The learned Tribunal found that a building in the said area built on 1648 square yards having a monthly rental value Rs. 1,000 was sold for Rs. 2,50,000 .in March 1958. The sale price of the said pro perty worked out to 32 times of the monthly rental value. In the second case a total area of 2000 square yards along with a building on it was sold on 11th April, 1958 for Rs. 1,95,000 having a gross annual letting value of Rs. 9,

600. In this case the sale price of the property came to nearly 30 times of the rental value. After considering all the data on the record the Tribunal came to the conclusion that as the report of the valuer regarding the market. value of the immovable property was worked out on a hypothetical basis they would prefer to adopt a more scientific test of finding the market value namely on the basis of the rental, value of admitted sale of similar property in the same locality near 'about the time of the death of the deceased as evidenced by the two sale‑deeds referred to above. Considering the case of the accountable party in this light they held that the valuation of the property adopted by the Controller comes to 30 times of the rental annual value which, in their opinion, appeared to be a fair estimate of the property valuation. They accordingly upheld the estimate of the value of the Clifton property assessed by the Controller of Estate Duty. It was contended by the accountable party before the Tribunal that the report of the valuer could not be modified or in any way interfered with under the provisions of the Estate Duty Act. This contention was repelled. Later on the accountable party made an application for referring the question of law arising out of the order of the Tribunal to this Court. The learned Tribunal by order dated 26‑6‑1961 has referred the following question for the determination of this Court: "Whether or not the Appellate Tribunal is bound to abide by the value of property appraised by the valuer, when the question as to disputed value has been referred by the Tribunal to the Valuer appointed under section 59(4) of the Estate Duty Act"?

2. In support of the reference the only point urged by Mr. Dingomal, the learned counsel for the accounting party, is that the learned Tribunal should not have modified or in any way interfered with the report of the valuer as he is appointed by the Government. The contention of the learned counsel has not impressed us. In order to appreciate his contention it would be necessary to refer to section 59, subsection (3) to subsection (7) which deals with the point raised in the reference: "59(3) The Appellate Tribunal may, before disposing of an appeal, call for such particulars as it may require respecting the matters arising in the appeal or, where a reference has been made under subsection (4), cause further enquiry to be made by the valuer or valuers, as the case may be, and after giving the appellant, the Controller and, where necessary, the valuer or valuers, as the case may be, an opportunity of being heard may pass, subject to the provisions of subsections (4), (5), (6) and (7), such orders as it thinks fit and shall send a copy of such orders to the appellant and the Controller. (4) Where the dispute pertains to the valuation of any property, the appellant may require the Appellate Tribunal to refer the question of disputed value to the valuers and the Tribunal shall thereupon refer the question to any one valuer or more valuers than one as it thinks fit. (5) The valuer or valuers, as the case may be, shall on a reference made under subsection (4) appraise the value of the property in question after holding such enquiry as may be considered necessary and submit a report containing the basis on which the proposed valuation is founded to the Appellate Tribunal. (6) The Appellate Tribunal shall furnish a copy of the report submitted to it under subsection (5) to the appellant and the Controller. (7) The cost of the valuation made in pursuance of subsec tion (4) shall be paid by the appellant. " It will be noticed that the only right which an appellant has ‑under section 59(4) is that he can require the Appellate Tribunal to refer) the question of the disputed value to the valuers and the Tribunal is bound thereupon to refer it to any one valuer or more valuers than one as it thinks fit. But under section 59 (3) it is open to the Tribunal to pass such orders as it thinks fit. It is therefore, perfectly clear that the Tribunal is not bound to abide by the value of the property appraised by the valuer when the question of disputed value is referred to him at the instance of the appellant under section 59(4) of the Estate Duty Act. Mr. Dingomal was unable to refer us to any other provision in the Estate Duty Act in support of his contention. His main contention was that since the valuers are appointed by the Government, importance should be attached to their report and the Tribunal ought to have abided by the value of the property appraised by Mr. Solangi who was the valuer appointed by the Tribunal in the present case. This contention has no force because under section 59(3) of the Estate Duty Act it is open to the Tribunal to disregard the report of the valuer if it is found to be based on unreliable material or unscientific basis. We, therefore, find no force in this reference.

3. In the result, we would answer the question in the negative. Parties are directed to bear their own costs. S.Q. Reference answered in the negative.