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Issues: Valuation of property for wealth tax purposes, ownership of property, inclusion of property value in net wealth, consideration of repairs and renewals in property valuation.
In this case, the appeals by the assessee were consolidated and disposed of together due to common issues. The assessee, a resident company, was involved in assessment years 1986-87 and 1987-88 for the property named 'DHANUR BUILDING.' The Commissioner of Wealth-tax (Appeals) had sustained the valuation of the property for 1986-87 at cost subject to adding actual repair expenses. For 1987-88, a partial relief was granted as a portion of the building was used for office purposes. The assessee disputed the decision, arguing that they were not the owners as the property was not registered in their name. The WTO adopted the purchase cost as the property value for both years. The CWT(A) agreed with the WTO, considering market price and repair expenses. The assessee contended that the property value should not be included as they were not the owners. The ITAT found that the property was not registered in the name of the assessee during the relevant valuation dates. Citing the case law of Nawab Sir Mir Osman Ali Khan v. CWT, the ITAT held that property value should not be included in the net wealth of the assessee. However, the investment made by the assessee on repairs and renewals should be included. The ITAT reversed the CWT(A) orders and directed the exclusion of the property value from the net wealth for the assessment years 1986-87 and 1987-88. The appeals were allowed, subject to directions. Therefore, the judgment focused on the ownership and valuation of the property for wealth tax purposes, considering the registration status, investment in repairs, and the legal implications of property belonging for net wealth assessment.
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