The assessee is entitled to choose the method of valuation most favourable to him. The value determined by the municipal authorities or the value assessed by the Wealth-tax Officer against a co-sharer for the same assessment year can be adopted.

M.R.Sharma, J.

1. The following questions of law have been referred to us for opinion by the Income-tax Appellate Tribunal, Chandigarh Bench :

"(1) Whether, on the facts of the case, the Tribunal was, in law, in error : (i) in sustaining the rejection of the valuers report at annexure 3, so far as the assessees 1/3rd share in the house property in Harkishan-pura is concerned;

(ii) in sustaining the rejection of the land and building method for valuation of the aforesaid asset; and

(iii) in adopting a multiple of 12 for valuing the aforesaid asset according to the capitalization method ?

(2) Whether, on the facts and circumstances of the case, the Tribunals order as to valuation of the assessees 1/3rd share in the house property in Harkishanpura, Ludhiana, is vitiated by reason of not having taken into consideration the wealth-tax assessment order dated January 7, 1975, made in the case of the assessees brother, Shri Ranjit Kumar, a co-sharer in the said property for the assessment year 1972-73 ?"

2. The assessee was the owner of 1/3rd share of the property in dispute which he valued at Rs. 73,333 on the basis of the certificate given by an estate valuer appointed by the Government of India. The said valuer had in his certificate mentioned that the property concerned was situate in Harkishan-pura behind Gill Road and was connected to Gill Road by a lane. He further mentioned that the locality was not very important from business angle.

3. The Wealth-tax Officer fixed the value of this property at 17 times the annual letting value of Rs. 10,270. The Appellate Assistant Commissioner sustained the rejection of the report of the valuer and upheld the value as fixed by the Wealth-tax Officer. On further appeal, the Appellate Tribunal fixed the value of the property at 12 times the annual letting value.

4. In this reference, the learned counsel has submitted that if the value determined on the basis of the land and building method is more favourable to the assessee, the method of determining the value of the property on the basis of its annual letting value should not be accepted. It was further submitted that in the case of Ranjit Kumar who is a co-sharer and holds l/3rd share of the property in question the Wealth-tax Officer, vide his assessment order dated January 7, 1975, has accepted the value of l/3rd share as Rs. 73,333 and that a different yardstick should not be adopted in case of the present assessee.

5. On the other hand, Shri D. N. Awasthy, the learned counsel for the revenue, has argued that it was permissible for the Tribunal to fix the value of the property on the basis of 12 times its annual letting value. The principle of res judicata applied to a case in which the same parties were arrayed as against each other and if one assessee had been able to hoodwink the revenue it was no ground to give the same benefit to another assessee.

6. After giving our careful consideration to the arguments advanced at the Bar, we are of the view that the pleas raised on behalf of the assessee deserve to be upheld.

7. Section 3 of the Wealth-tax Act, 1957 (hereinafter called "the Act"), is the charging Section and entitles the authorities to impose tax on the net wealth of an assessee on the corresponding valuation date. When the items of wealth consist of immovable property, their value has to be determined at the rates at which a willing buyer would purchase the same from a willing seller.

8. C.B.R. Circular No. 3 W.T. of 1957 of the Central Board of Revenue, New Delhi, dated the 28th September, 1957, laid down that the value of lands and buildings should be estimated with due regard to the nature, size and locality of the property, the amenities available and the price prevailing for similar assets in the same locality. It also recognises the method by which the value of the property is determined for purposes of property tax under the laws and regulations relating to the municipalities and municipal corporations. In State