9911796707
TMI Blog1986 (8) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... essed to Wealth-tax Act in respect of the same property at the same value in the earlier assessment year and GT Act being analogous to the Wealth-tax Act, the same value should be adopted for gift-tax purposes. He also contended that the property being let out, the accepted method of valuation for Wealth-tax Act being capitalisation of the net rental, which indicates a reasonable market value should be taken to be the market value even for gift tax purpose. His contention was based on the fact that the property was tenanted for several years with the same tenant continuing even after the gift and transfer of the property in favour of the donee. He also contended that no prudent buyer would pay for the property anything more than the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the departmental representative Mr. Koolwal was concerned, his contention was based on the findings of the authorities below and further he only added that the stamp duty is levied in respect of a transfer of property from one to another and it is calculated with reference to the value of the property shown in the instrument of transfer. Further, the Registrar has certain basis for arriving at a particular value. It is a duty of the Registrar to ensure that the stamp duty is leviable on the value of the property correctly and he can enforce prosecution in case he is of the view that the value shown is less for the sole purpose of avoiding the tax. He, therefore, contended that the value as was taken by the Registrar of Properties on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same line. Under both Act, the emphasis is on the existence of a open market and the open market price is merely the measure of value. Normally under both the Acts the accepted method of valuation of a property is the readily available sale instances in the locality in which the property is situated. In the absence of that indicator, the other methods of valuation are followed namely, the land and building method, the rent capitalisation method and the like. In case of a property which is let out but, sold on a particular date immediately following the valuation date, the WTO would have only done the proper thing of taking the actual sale value of the property on the basis that it could indicate the value on the valuation date. The other e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the properties We see no reason why this property value should be by-passed in favour of the capitalised value shown by the assessee, as already spelt out earlier, the direct evidence is the value which a purchase would have paid which is so reflected in the instrument of purchase deed and registered as such by the stamp authorities is the proper value to be adopted in the instant case for levy of gift tax. Perhaps realising that an assessee may be made to pay gift-tax on a property so gifted on which he had also to pay the stamp duty charges, the legislatures have provided for in section 18A of the GT Act to give credit for the stamp duty so paid on the property. The argument that the donor if he had to sell the property he would have at b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation of property under the Wealth-tax Act and their Lordships were not considering a sale instance or a transfer as existing in the present case. The said case, therefore, cannot be applied to the present situation. In the case of Sudesh Chandra Talwar (1982) 137 ITR 483 (Cal), their Lordships of the Calcutta High Court were considering the value of the property for WT purpose. Their Lordships made a very pertinent observation and that is "in determining the value of a property another factor that has to be borne in mind is that such a method should be preferred which has more objective reliable date than mere subjective opinions" even though their Lordships ultimately held that in the case of let out property, the proper basis would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is commonly realised by the Courts is that the rent capitalisation method would become applicable only when a real sale instance is available, and when the real sale instance is available it is a necessity to be taken into account. 5. We have already made out observation to the fact that the value on the basis of which stamp duty has been levied on the property is an indicator of a market value of a property which stamp duty has been leived on the property is an indicator of a market value of a property which is by and large accepted to be depicting the true market value of the property, except in cases where there is evidence to the effect that the buyer has paid more than what was shown in the instrument of transfer. The Legislatures ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
