2021 (9) TMI 896 - AT - Wealth-tax

Wealth tax assessment - estimation of value of asset - assessee failed to justify value adopted in wealth tax returns with necessary evidences - Revenue authorities determine value of the property as per market value - HELD THAT - As regards property at Bharaniputtur, there is a dispute between the assessee and Assessing Officer in respect of extent of landholding. The assessee claims that he owned 0.4 acres of land, whereas the Assessing Officer has adopted 0.8 acres of land. A similar issue has been considered by the Tribunal for assessment years 2009-10 and 2010-11, where issue has been set aside to the file of Assessing Officer to ascertain date of purchase of land and extent of land held by the assessee. Even before us, the assessee has filed necessary evidences to prove that extent of land held by the assessee is only 0.4 acres. Therefore, we set aside this issue to the file of the Assessing Officer to ascertain fact with regard to extent of land held by the assessee. As regards land at Sholinganallur the assessee has sold property on 28.04.2011, just after 28 days from the date of valuation and thus, estimated price of the property as on valuation date shall be at least value derived by the assessee from sale of property. Therefore, we are of the considered view that there is no merit in the arguments of the assessee that value of the property as on valuation date is at ₹ 10.99 crores. However, fact remains that when the rules prescribed for determining value on the basis of fair market value, the Assessing Officer has adopted guideline value prescribed for payment of stamp duty. In our considered view, guideline value fixed by stamp duty authorities is not relevant to decide value of any asset, other than cash, as on valuation date. Hence, we direct the Assessing Officer to adopt market value of the property as on valuation date at ₹ 21.06 crores, which is the price derived by the assessee from open market when the property was sold in the month of April, 2011. Appeal filed by the assessee is partly allowed for statistical purposes.

Summary

Issues:
1. Condonation of delay in filing appeal
2. Valuation of property at Sholinganallur
3. Extent of landholding at Bharaniputtur

Condonation of Delay:
The appeal was filed by the assessee against the order passed by the CIT-(A)-16, Chennai. The assessee requested condonation of a 28-day delay in filing the appeal, citing non-residency and unavailability in India during the relevant period. The delay was deemed unintentional, and the Tribunal, after considering the reasons provided, condoned the delay, admitting the appeal for adjudication.

Valuation of Property at Sholinganallur:
The dispute revolved around the valuation of the property at Sholinganallur. The Assessing Officer valued the property at ?23.67 crores, while the assessee contended it should be valued at ?10.99 crores. The Tribunal noted that the property was sold for ?21.06 crores shortly after the valuation date. Despite the assessee's argument regarding guideline value, the Tribunal held that the market value at the time of sale should be considered. Consequently, the Tribunal directed the Assessing Officer to adopt the market value of ?21.06 crores as the valuation of the property.

Extent of Landholding at Bharaniputtur:
Another issue was the extent of landholding at Bharaniputtur. The Assessing Officer determined the landholding to be 0.8 acres, while the assessee claimed ownership of only 0.4 acres. The Tribunal observed a similar issue in previous years and decided to set this matter aside for the Assessing Officer to verify the actual extent of land held by the assessee. The Tribunal directed a reevaluation based on the evidence presented by the assessee.

In conclusion, the Tribunal partly allowed the appeal for statistical purposes, directing the Assessing Officer to reevaluate the valuation of the property at Sholinganallur based on the market value at the time of sale. Additionally, the Tribunal instructed a reassessment of the extent of landholding at Bharaniputtur. The order was pronounced on 17th September 2021.