2019 (11) TMI 1121 - AT - Wealth-tax

Net Wealth determination - valuation of property - Fair market value versus Circle rate - It was submitted that, assessee was not even in a position to avail the loan against this property, as the said land had encroachments on it - HELD THAT - In the absence of production of any material in support of the assessee s contentions, the AO has adopted the circle rate available in www.tnreginet.net as the market value and assessed the value for each of the impugned assessment year. The ld.CWT(A) has held that the assessee canvassed certain factors for adoption of lower value, however, he has not proved either to the satisfaction of the AO or to the satisfaction of the ld CWT(A) that what is canvassed by him is the fact and hence he upheld the action of the AO for the assessment years 2007-08 to 2012-13, respectively. Even before us also, the assessee has not placed any material in support of his contentions. Therefore, we do not find any reason to interfere with the orders of the ld.CWT(A), supra, and hence dismiss all these assessee s appeals.

Summary

Issues: Valuation of property for wealth tax assessment

Analysis:
1. The assessee filed appeals against the Commissioner of Wealth Tax (Appeals) concerning the valuation of property for the assessment years 2007-08 to 2012-13.
2. The primary issue revolved around the valuation of the land at T.Nagar, where the assessee returned the value at a specific amount, citing encroachments and inability to avail loans against the property.
3. The assessee argued that the valuation adopted by the Assessing Officer (AO) was arbitrary, as it was based on circle rates without considering the encroachments and market value limitations due to encroachments.
4. The Departmental Representative contended that the assessee failed to provide evidence of encroachments affecting the property's value, including the inability to secure a bank loan or sell the property due to encroachments.
5. The ld. Commissioner of Wealth Tax (Appeals) upheld the AO's valuation, emphasizing that the assessee did not substantiate their claims with verifiable evidence, leading to the dismissal of the appeals.
6. The Appellate Tribunal, after considering the submissions and lack of supporting material from the assessee, affirmed the Commissioner's decision and dismissed all appeals, concluding that the valuation based on circle rates was appropriate in the absence of contrary evidence.

This judgment highlights the importance of substantiating claims with concrete evidence in valuation disputes for wealth tax assessments. The burden of proof lies with the assessee to support contentions regarding property valuation, especially when challenging the AO's assessment based on circle rates. Failure to provide verifiable evidence can result in the dismissal of appeals and affirmation of the initial valuation by the tax authorities.