1986 (7) TMI 133 - AT - Wealth-tax

Summary

Issues Involved:
1. Valuation of the assessee's one-fourth interest in certain plots of land.
2. Applicability of section 4(1)(b) and section 4(7) of the Wealth-tax Act, 1957.
3. Consideration of the bye-laws of the co-operative housing societies.
4. Relevance of the decision in the case of CWT v. Smt. Promila Bali.
5. Validity of the valuation done by the assessee's approved valuer.

Detailed Analysis:

1. Valuation of the Assessee's One-Fourth Interest in Certain Plots of Land:
The primary issue pertains to the valuation of the assessee's one-fourth interest in three plots of land located in two co-operative housing societies. The assessee initially declared a net wealth of Rs. 2,87,100, which was later revised to Rs. 1,99,100 based on an approved valuer's report. The valuer estimated the total value of the plots at Rs. 1,60,500, making the assessee's one-fourth interest worth Rs. 40,125. The IAC (Assessments) and the Commissioner (Appeals) upheld this valuation.

2. Applicability of Section 4(1)(b) and Section 4(7) of the Wealth-tax Act, 1957:
The assessee argued that section 4(1)(b) and section 4(7) should exclude his interest in the plots from his net wealth. The Tribunal, however, found that section 4(1)(b) would apply since it pertains to a member's interest in an association, including co-operative housing societies. Section 4(7) was deemed inapplicable as it refers to buildings or parts thereof, not open plots of land.

3. Consideration of the Bye-Laws of the Co-operative Housing Societies:
The assessee contended that the societies' bye-laws restricted the valuation of his interest to the deposits made with the societies. However, the Tribunal noted that the bye-laws allowed the transfer of shares with society approval, and there was no total ban on such transfers. The Tribunal emphasized that the plots were leased to the assessee and his brothers for 998 years, indicating a substantial interest that should be valued.

4. Relevance of the Decision in the Case of CWT v. Smt. Promila Bali:
The assessee relied on the Delhi High Court's decision in CWT v. Smt. Promila Bali to argue that only the deposits should be considered for wealth-tax purposes. The Tribunal found this case distinguishable, as the facts and circumstances differed significantly from the assessee's situation. The Tribunal upheld the IAC's decision to include the full value of the assessee's interest as per the valuer's report.

5. Validity of the Valuation Done by the Assessee's Approved Valuer:
The Tribunal gave significant weight to the valuation done by the assessee's approved valuer, noting that the valuer had considered the bye-laws of the societies. The Tribunal stated that courts have consistently held that valuations by approved valuers should be accepted unless contradicted by the department's Valuation Officer. The approved valuer's report, which estimated the total market value of the plots at Rs. 1,60,500, was found to be in accordance with the law.

Conclusion:
The Tribunal dismissed the appeal, upholding the inclusion of Rs. 40,125 in the assessee's net wealth as the value of his one-fourth interest in the plots. The decision was based on a thorough analysis of the applicable sections of the Wealth-tax Act, the societies' bye-laws, and the approved valuer's report.