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Issues: Valuation of residential house property
The judgment by the Appellate Tribunal ITAT CUTTACK dealt with the valuation of a residential house property following the death of an individual. The issues involved included the method of valuation to be applied, the relevance of wealth-tax assessments, and the applicability of specific provisions under the Estate Duty Act. Analysis: The accountable person appealed the valuation of a residential house property located in Berhampur. The valuation was initially determined by the Assistant Controller and later confirmed after referral to the Departmental Valuation Officer (DVO). The DVO's valuation of Rs. 3,13,300 was adopted, with a net value of Rs. 2,13,300 after exemptions. The accountable person disputed this valuation, arguing for the application of the rental method instead of the land and building method prescribed by the WT Rules. However, the Appellate Controller upheld the valuation, noting that objections were considered by the DVO and no material defects were raised during the appeal process. The accountable person's belated plea for valuation under r. 1BB of the WT Rules was deemed untimely, as the DVO's valuation was directed by a previous appellate authority, and no challenge was made against this direction. During the hearing, the accountable person's counsel contended that the property's valuation on a rental basis should be Rs. 46,075, considering certain deductions. Referring to the Estate Duty Act's provisions, specifically sub-s. (3) of s. 36, it was argued that the property's valuation should be frozen at Rs. 90,300 as of 1st April, 1971. The Appellate Controller's confirmation of the initial valuation was challenged on this basis. The Tribunal analyzed the applicable provisions of the Estate Duty Act, emphasizing the valuation of residential properties under the Wealth Tax Act. It was noted that the frozen valuation as on 1st April, 1971, should be applied for estate duty purposes, aligning with the provisions of s. 7(4) of the WT Act. Considering the accountable person's return valuation of Rs. 1,20,000 supported by a registered valuer, the Tribunal modified the order to adopt this value for the residential property. As the frozen valuation method was applied, there was no need to delve into the general valuation method of r. 1BB of the WT Rules. In conclusion, the Tribunal allowed the appeal, directing the adoption of the revised valuation of Rs. 1,20,000 for the residential property in question.
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