1995 (4) TMI 77 - AT - Income Tax

Fair Market Value, Immovable Property, Movable Property, Valuation Of Land, Valuation Officer, Wealth Tax Act

Issues Involved:
1. Valuation of open land situated at Old Padra Road, Baroda.
2. Valuation of Aim's House and Staff Quarters.
3. Inclusion of the value of net wealth.

Issue-wise Detailed Analysis:

1. Valuation of Open Land Situated at Old Padra Road, Baroda:

The primary contention revolves around the valuation of open land owned by the assessee at Old Padra Road, Baroda. The Assessing Officer (A.O.) assessed the land at Rs. 51,18,400 for the assessment year 1984-85 and Rs. 60,78,100 for the assessment year 1985-86, based on the report of the Departmental Valuation Officer (D.V.O.). The assessee had initially declared the land's value at Rs. 62,538, which was later revised to Rs. 1,44,146 based on a report by their Government Registered Valuer, Shri Kirit R. Patel. The A.O. rejected the assessee's valuation, noting that the land was subject to the Urban Land (Ceiling & Regulation) Act, 1976 (ULC Act), and relied on the D.V.O.'s report which considered the ULC Act's impact.

On appeal, the assessee argued that the land's value should be based on the compensation payable under the ULC Act, citing the case of CWT v. K.S. Ranganatha Mudaliar [1984] 150 ITR 619. However, the first appellate authority upheld the A.O.'s valuation, referencing the case of Sri Nallasenapathi Sarkarai Mandradiar v. CWT [1985] 151 ITR 144, which impliedly disturbed the findings of the earlier decision. The appellate authority also relied on the ITAT Ahmedabad Bench 'A' decision in WTA Nos. 701 to 703/Ahd/88, which did not uphold the assessee's claim.

The Tribunal noted that the land was provisionally declared excess under the ULC Act, but no final acquisition notification was issued. Consequently, the land could not be valued based on compensation receivable under the ULC Act. The Tribunal referred to the Madras High Court decision in Nallasenapathi Sarkarai Mandradiar, which held that land not finally acquired could not be valued on a compensation basis. The Tribunal concluded that the D.V.O.'s report, which considered the ULC Act's impact and provided rebates, was rational and just. Hence, the authorities' valuation was upheld.

2. Valuation of Aim's House and Staff Quarters:

The assessee declared the value of Aim's House at Rs. 1,82,658 in the original return, later amended to Rs. 1,81,927. The D.V.O. assessed the value at Rs. 5,54,500, while the assessee's valuer estimated it at Rs. 3,63,854. The A.O. relied on the D.V.O.'s report, and the first appellate authority upheld this valuation. The Tribunal found no substantial arguments from the assessee challenging this valuation and thus did not interfere with the authorities' assessment.

3. Inclusion of the Value of Net Wealth:

The issue of including the value of net wealth was not substantially argued by the assessee before the Tribunal. There were no specific arguments or contentions raised regarding the valuation of the jeep or other assets. Consequently, the Tribunal rejected these grounds as well.

Conclusion:

The Tribunal dismissed both appeals of the assessee, upholding the authorities' valuation of the open land, Aim's House, and Staff Quarters. The Tribunal emphasized that the valuation of the open land should consider the ULC Act's impact but not be based solely on the compensation method since the land was not finally declared excess or vested with the Government. The Tribunal found the D.V.O.'s approach rational and just, affirming the authorities' decisions.

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