2002 (2) TMI 18 - HC - Wealth-tax

1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the market value of the property Himmanshu Bhawan should be determined by applying a multiple of ten to the net annual value? - 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing a deduction of Rs. 50,000 from the fair market value of Himanshu Bhawan on account of declaration made by the assessee under section 3(l) read with section 13 of the Voluntary Disclosure of Income and Wealth Act, 1976? - we answer both the questions in the affirmative, i.e., in favour of the assessee and against the Revenue.

Summary

Issues:
1. Valuation of property 'Himanshu Bhawan' under the Wealth-tax Act, 1957.
2. Deduction of Rs. 50,000 from the fair market value of 'Himanshu Bhawan' under the Voluntary Disclosure of Income and Wealth Act, 1976.

Valuation of Property 'Himanshu Bhawan':
The Tribunal referred questions regarding the valuation of the property 'Himanshu Bhawan' under the Wealth-tax Act, 1957. The Wealth-tax Officer initially applied a multiplier of 13.333 to the net annual value, which was disputed. The Assistant Commissioner later reduced the multiplier to two, and the Tribunal applied ten times the net annual rent. The assessee argued for a lower multiplier based on precedents from different High Courts. The Court observed the varying multipliers used by different High Courts but upheld the Tribunal's decision of applying a ten times multiplier for valuing the property by rent capitalization method. The Court found no justification to interfere with the Tribunal's decision.

Deduction under Voluntary Disclosure of Income and Wealth Act, 1976:
The second issue involved the deduction of Rs. 50,000 from the fair market value of 'Himanshu Bhawan' under the Voluntary Disclosure of Income and Wealth Act, 1976. The Tribunal allowed this deduction based on the provisions of section 3(1) read with section 13 of the Act. The assessee had disclosed Rs. 50,000 under the voluntary disclosure scheme, claiming it was invested in the construction of the house, making it eligible for exemption under the Act. The Court noted that this fact was not disputed in the Tribunal. Consequently, the Court found no reason to interfere with the Tribunal's decision and ruled in favor of the assessee, allowing the deduction of Rs. 50,000.

In conclusion, the Court answered both questions in favor of the assessee and against the Revenue. The reference made to the Court was disposed of accordingly, affirming the valuation of 'Himanshu Bhawan' and allowing the deduction under the Voluntary Disclosure of Income and Wealth Act, 1976.