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TMI Blog1982 (1) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusion was sought of the value of 41.72 acres of wet land and 73.49 acres of dry land. What the WTO did was to include the value of lands themselves, which were said to have been transferred, in the assessee's net wealth on the ground that the assessee continued to be the owner thereof and he deducted therefrom amounts received by way of advance which was Rs. 3,000 for the assessment year 1970-71, Rs. 1,03,600 for the assessment year 1971-72 and amounts on similar basis in the subsequent years. The assessee appealed and contended before the AAC that the value of the lands in respect of which persons had been put in possession and part consideration obtained should be totally excluded. The AAC took the view, following the decision of the Andhra Pradesh High Court in V. Sankaraiah v. Land Reform Tribunal AIR 1976 SC 58, that the transfers were valid in law and the assessee was no longer the owner of the land and, therefore, the value of the land should be excluded in computing the net wealth of the assessee. He, therefore, directed the exclusion of the value of the lands. But, at the same time, he stated that the amounts receivable under the documents as well as received earlier s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Andhra Pradesh High Court in CIT v. Nawab Mir Barkat Ali Khan 1974 Tax LR 90, to canvass the proposition that as long as a registered document was not executed, even if full consideration had been received, a transferor would continue to be the owner of the property and that in India there was no distinction between legal ownership and beneficial ownership. While this was a decision given in income-tax proceedings, the learned departmental representative submitted that in wealth-tax assessment also it was held that the value of properties was includible by the decision in CWT v. Late Nawab Sri Mir Osman Ali Khan Bahadur 1974 Tax LR 367 (AP). In reply, the learned counsel for the assessee submitted that the judgments of the Andhra Pradesh High Court relied on by the learned departmental representative had not noticed the judgment of the Supreme Court in the case of R.B. Jodhamal Kuthiala v. CIT [1971] 82 ITR 570 and that the Punjab and Haryana High Court in the case of Smt. Kalarani v. CIT [1981] 130 ITR 321 had referred to this aspect in differing from the judgment of the Andhra Pradesh High Court. The learned counsel went on to state that where there was a conflict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch there were documents, we would take a specimen agreement dated 30-7-1970, the contents of which read as under : PRE SALE AGREEMENT FOR RS. 14,000 I. Pre sale agreement made on the day of the 30th July, 1970 between Smt. Kommuru Annapurnamma w/o Appadu Dora of Bhogapuram Village, Bheemunipatnam Taluk, Visakhapatnam District and Sri 1. Pytireddi Prakhar Rao s/o Appa Rao. 2. Pytireddy Jeevana Rao s/o Appa Rao Vendees of Koraput District, Nowrangapur. II. Whereas I agree to sell the Gerayeti wet/dry land described in Para 3 of the Schedule and whereas you agreed to purchase the said property, I have agreed to sell the said property to you for Rs. 14,000 (fourteen thousand only). In pursuance of this agreement, I have received Rs. 8,000 (eight thousand only) as part payment made by you to me on this day and agreed to receive the remaining balance of Rs. 6,000 at the time of registration. I agree, as per the draft sale deed given by you, to get sale deed registered in your favour. The registration charges shall be equally shared by us. From this day onwards you are liable to pay land tax, etc., on this property and you are put in possession of the property conveyed today (30-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is unexceptionable, but has to be viewed in the context of facts. Where there are restrictions in the alienation of property, it is clear and settled law that the market value thereof has to be discounted. The Supreme Court has recognised this principle in CWT v. P.N. Sikand [1977] 107 ITR 922 where it has been pointed out that such restrictions would have the effect of depressing the value of an asset from what it would fetch if it were free from the burden or disadvantage. The Court also cautioned that to value an asset on the basis that such a burden or disadvantage was to be ignored would be to value an asset differently in content and quality from that actually owned by an assessee. The question of the depression in market value in the case of shares of private limited companies which were subject to restriction in marketability had come up before the Madras High Court in R. Rathinasabapathy Chettiar v. CWT [1974] 93 ITR 555 and adverting to this in the later case of CGT v. S. Venu Srinivasan [1978] 112 ITR 771, the Madras High Court observed at page 775 as under : "If we do not take this fact into consideration we will be making an unrealistic approach and courts have not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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