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Issues: Valuation of assessee's interest in a property for assessment year 1981-82. Interpretation of provisions of Wealth-tax Act regarding ownership of property and applicability of section 7(4).
Analysis: 1. The appeal before the Appellate Tribunal ITAT Madras-D related to the assessment year 1981-82, focusing on the valuation of the assessee's interest in a property at 69, Alagappa Road, Madras. The key issue was determining the value of the property as on 31-3-1981, considering a subsequent sale for Rs. 12 lakhs in November 1981. The assessee contended that the valuation date did not indicate any intention to sell the property, and the value should be frozen under section 7(4) of the Wealth-tax Act due to co-residence with his mother. 2. The WTO initially assessed the property value at Rs. 11,50,000, rejecting the assessee's arguments. Upon appeal, the AAC held that the assessee had a vested remainder in the property, becoming the owner only upon his mother's death. The AAC considered the sale price as the best evidence of market value, adopting Rs. 11,50,000 as the property's value. 3. The assessee's counsel presented a Will executed by the father, establishing the mother's life interest in the property with succession to the assessee. The counsel argued that the assessee had a vested right in the property throughout, qualifying it as belonging to the assessee under section 7(4). The counsel emphasized the exclusive residential use by the assessee and his mother. 4. The Departmental Representative cited a Madras High Court case to argue against the applicability of section 7(4), emphasizing the mother's life interest and the absence of absolute ownership by the assessee. The counsel countered, highlighting the unique relationship between mother and son, asserting the assessee's right as an executor and resident of the property. 5. The Tribunal analyzed the Will's provisions, aligning with the Madras High Court's interpretation of a right of residence rather than a life interest for the mother. Considering the assessee's vested remainder, the Tribunal concluded that the property belonged to the assessee and was exclusively used for residential purposes, meeting the criteria of section 7(4). 6. Referring to relevant case law, the Tribunal emphasized the customary traditions supporting the assessee's right to reside in the property alongside his mother. The broader scope of section 7(4) under the Wealth-tax Act was acknowledged, leading to the allowance of the appeal and the adoption of the pegged value of Rs. 11,50,000 for assessment. This detailed analysis reflects the Tribunal's thorough examination of the legal provisions, case law, and factual circumstances to determine the valuation and ownership of the property in question under the Wealth-tax Act.
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