2004 (9) TMI 327 - AT - Wealth-tax

Summary

Issues Involved:
1. Valuation of Jubilee Hills property.
2. Valuation of land at Miyapur.
3. Claim of exemption under section 5(1)(vi) of the Wealth-tax Act, 1957.
4. Reference to the Valuation Officer under section 16A of the Wealth-tax Act.

Issue-wise Detailed Analysis:

1. Valuation of Jubilee Hills Property:
The assessee owned a plot at Jubilee Hills, Hyderabad, and claimed exemption under section 5(1)(vi) of the Wealth-tax Act, 1957. The Assessing Officer (AO) denied the exemption, stating the construction was incomplete and not in a habitable condition. The AO computed the market value of the land based on the Sub-Registrar's records. The CIT(A) upheld this decision, noting the lack of evidence for the building's completion and habitability. The Tribunal, however, concluded that the property should be considered a "part of a house" for exemption purposes, noting that the ground and first floors were largely complete, thus qualifying for exemption under section 5(1)(vi).

2. Valuation of Land at Miyapur:
The assessee claimed the land at Miyapur was agricultural and thus exempt. The AO rejected this claim, valuing the land based on rates from the District Registrar. The CIT(A) agreed, stating the land was part of a housing society layout and not agricultural. The Tribunal found no evidence to support the land being agricultural and upheld its non-agricultural status. However, it directed the AO to refer the valuation to the Valuation Officer due to legal disputes regarding the title, aligning with the decision of the Hon'ble Punjab and Haryana High Court in Raj Paul Oswal v. CWT.

3. Claim of Exemption under Section 5(1)(vi):
The assessee claimed exemption for the Jubilee Hills property under section 5(1)(vi). The AO and CIT(A) denied this, citing incomplete construction. The Tribunal, however, interpreted the term "house" to include structures with walls and a roof, even if not fully complete. It referenced the ITAT Hyderabad Bench's decision in WTO v. Mootha Gopalakrishna, which stated any structure with walls and a roof qualifies as a house. The Tribunal thus granted the exemption, considering the property as a "part of a house."

4. Reference to the Valuation Officer under Section 16A:
The assessee argued the AO should have referred the valuation to the Valuation Officer as the assessed value exceeded the declared value by more than Rs. 50,000. The Tribunal noted that while the AO has discretion under section 16A, the lack of a declared value by the assessee (due to claiming exemption) meant the AO was not mandated to refer the valuation. However, for the Miyapur land, the Tribunal directed the AO to refer the valuation to the Valuation Officer, considering the legal disputes over the title.

Conclusion:
The Tribunal partly allowed the appeals, granting exemption for the Jubilee Hills property under section 5(1)(vi) and directing the AO to refer the Miyapur land valuation to the Valuation Officer. The decisions emphasized the interpretation of "house" and procedural adherence under section 16A of the Wealth-tax Act.