2003 (2) TMI 39 - HC - Wealth-tax

Wealth Tax Rules 1957 - Whether the Tribunal was right in law in holding that the deceased had 1/3rd share in Nahata Bhawan Chopasani Road Jodhpur and the said share passed on the death of the deceased? - Whether the Tribunal was right in law in not computing the value of Nahata Bhawan in accordance with the provisions of rule 1BB of the Wealth tax Rules 1957? - Whether the Tribunal was right in law in not applying multiple of ten on the net maintainable rent while computing value of Nahata Bhawan? - Whether the Tribunal was right in law in determining interest of the deceased in Nahata Bhawan at Rs. 2 lakhs? - we answer question No. 1 in the affirmative i.e. in favour of the Revenue and against the assessee-accountable person. - So far as questions Nos. 2 3 and 4 are concerned we answer all these questions in the negative i.e. in favour of the accountable person and against the Revenue.

Summary

Issues:
1. Determination of deceased's share in Nahata Bhawan passing on death.
2. Valuation of Nahata Bhawan under Estate Duty Act.
3. Application of multiplier on net maintainable rent for Nahata Bhawan valuation.
4. Determination of interest of deceased in Nahata Bhawan.

Issue 1:
The case involved the question of whether the deceased had a 1/3rd share in Nahata Bhawan, Jodhpur, which passed on his death. The Assistant Controller and the Tribunal affirmed that the deceased did have a share in the property, which passed to his heirs. The Tribunal's findings were based on the historical treatment of the trust deed and trust properties, establishing the deceased's ownership of the share in Nahata Bhawan. The court upheld the Tribunal's decision, concluding that the deceased's share did pass to the accountable persons upon his death.

Issue 2:
The valuation of Nahata Bhawan under the Estate Duty Act was contested by the accountable persons, who sought to value the property as per rule 1BB of the Wealth-tax Rules. The court referred to a Bombay High Court decision, stating that in the absence of a specific provision under the Estate Duty Act for valuing property passing to accountable persons, rule 1BB of the Wealth-tax Rules could be applied. Consequently, the court held that the property should be valued as per rule 1BB of the Wealth-tax Rules, 1957.

Issue 3:
The accountable persons also raised concerns regarding the application of a multiplier on the net maintainable rent for valuing Nahata Bhawan. The court considered a previous judgment where a ten times multiplier was applied in a similar case in Jaipur. Based on this precedent, the court decided that a ten times multiplier of the rent received should be taken into account while applying rule 1BB of the Wealth-tax Rules for valuing the deceased's 1/3rd share in Nahata Bhawan.

Issue 4:
Lastly, the determination of the deceased's interest in Nahata Bhawan at Rs. 2 lakhs was questioned. The court's decision on this issue was not explicitly mentioned in the summary provided. However, it can be inferred that the court's overall ruling favored the accountable person against the Revenue on this matter, as indicated by the affirmative response to question No. 1 in favor of the Revenue and the negative responses to questions 2, 3, and 4 in favor of the accountable person.

In conclusion, the court upheld the Tribunal's decision regarding the deceased's share in Nahata Bhawan passing on death, directed the valuation of the property as per rule 1BB of the Wealth-tax Rules, and applied a ten times multiplier on the net maintainable rent for valuation purposes. The judgment favored the accountable person on the valuation issues raised, ultimately disposing of the reference accordingly.