1995 (4) TMI 101 - AT - Wealth-tax

Summary

Issues: Valuation of property based on rent capitalization method, application of Sch. III of WT Act, valuation of vehicles

Valuation of Property based on Rent Capitalization Method:
The appeals pertain to the valuation of a show room in Bombay, purchased by the assessee and leased to the Consulate General of Germany. The Assessing Officer referred the valuation to the Valuation Officer, who estimated the fair market value higher than the declared value. The assessee argued for a lower valuation based on net annual rent capitalized at ten times. The CWT(A) upheld the higher valuation, considering market value and reversionary value. The Tribunal directed the Assessing Officer to value the property as per Sch. III of WT Act, emphasizing rent capitalization method and excluding reversionary value.

Application of Sch. III of WT Act:
The Tribunal noted that Sch. III of WT Act, effective from April 1, 1989, was not applicable to the assessment years in question. However, it emphasized that for a let-out property, the rent capitalization method in Sch. III should determine the value. The Tribunal directed the Assessing Officer to value the property in accordance with Sch. III, excluding reversionary value from the valuation.

Valuation of Vehicles:
The appeals also involved the valuation of vehicles, where the Assessing Officer's estimates exceeded the declared values. The CWT(A) confirmed the Assessing Officer's values based on the preceding year's order. The Tribunal upheld the Assessing Officer's estimates, noting the absence of evidence to challenge the fair and reasonable estimates made.

The Tribunal partly allowed all three appeals, directing valuation of the property as per Sch. III based on rent capitalization method and upholding the Assessing Officer's estimates for the vehicles due to lack of evidence challenging their fairness and reasonableness.