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Issues: Valuation of property for wealth tax purposes; Interpretation of rule 1BB of the Wealth-tax Rules; Deduction of tax on capital gains in determining fair market value.
In this case, the assessee filed applications under section 27(3) of the Wealth-tax Act, 1957, seeking reference of six questions of law for the assessment years 1971-72 and 1972-73. The primary issue revolved around the valuation of a property in New Delhi, where the assessee had returned the value of his share based on a registered valuer's report. However, the Wealth-tax Officer valued the property higher, leading to appeals before the Appellate Assistant Commissioner and subsequently before the Tribunal. The assessee contended that the valuation should be done under rule 1 BB of the Wealth-tax Rules and that capital gains should be deducted in determining the fair market value. The Tribunal accepted the assessee's contention regarding the valuation under rule 1 BB but declined to direct the Wealth-tax Officer to accept the higher value returned by the assessee if it exceeded the valuation under rule 1 BB. The Tribunal's decision not to consider other grounds raised by the assessee in the original appeal was influenced by its view on the applicability of rule 1BB. Consequently, the assessee filed applications seeking reference of six questions to the High Court. The High Court, after hearing both parties, directed the Tribunal to refer only one question to the court, which pertained to whether the Wealth-tax Officer should accept the value shown by the assessee in the returns if it is higher than the valuation arrived at under rule 1BB. The court held that the other questions did not need to be referred at that stage, as they were either consequences of the main question or were not pressed by the assessee. The court also deemed one question self-evident and not warranting a reference. Ultimately, the court disposed of the applications, instructing the Tribunal to refer only the specified question for decision.
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