9911796707
TMI Blog1984 (5) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... ls is, whether the assessee, both in his capacity as HUF as well as individual, is entitled to claim that the respective shares owned by the HUF and the individual in the property at 20, Barakhambha Road, New Delhi, used exclusively for residential purposes, should be valued as per the provisions of section 7(4) of the Wealth-tax Act 1957 ('the Act'). There are certain other grounds relating to the non-application of rule 1BB of the Wealth-tax Rules 1957 (' the Rules ') while valuing residential properties as also the non-acceptance of the report of the Valuation Officer to whom a reference was made under section 16A of the Act. The facts in this regard are briefly as under. 2. The assessee in its capacity as HUF owned one-third share in the property at 20, Barakhamba Road, New Delhi, during the previous year relevant to the assessment year 1977-78. Its share in the same property during the previous year relevant to the assessment year 1978-79 was one-ninth. The assessee has in his capacity as individual also owned one-thirty-sixth share of the same property during the previous years relevant to the assessment years 1977-78 and 1978-79. The value of one-third share of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ividual for 1977-78, he determined the value of the one-thirty-sixth share at Rs. 6,50,000. For 1978-79, the value of such share was determined at Rs. 6,54,148. He adopted the above values, both in respect of the individual as well as the HUF, despite the fact that a reference was made to the Valuation Officer under section 16A and the Valuation Officer had proposed lower valuations in respect of the shares of the assessees. The reason given by him for ignoring the values proposed by the Valuation Officer was that the Valuation Officer had, while valuing the respective shares of the assessees in the property, had applied the provisions of section 7(4) and thereby exceeded the powers vested in him for the purpose of valuation under section 16A. 3. Aggrieved with the valuations taken by the WTO, both in respect of the individual as also the HUF, appeals were preferred before the AAC. The appeals relating to the HUF for both the years as well as the appeal relating to the individual for the assessment year 1978-79 were decided by the AAC on 19-9-1983 and he confirmed the orders of the WTO in all these cases. The appeal relating to the individual for 1977-78 was decided by his predec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial use. 6. Shri Bahri, appearing for the assessee, made the following submissions before us. He mentioned that the property in question as well as the assessee's share therein were exclusively meant for residential use, whenever the assessee visited Delhi. He submitted that while applying this section, a literal interpretation of the words used therein should not lead to the denial of the exemption allowed under this section, if it is found that the property in question is genuinely meant for residential use and in fact the same was not put to any commercial use. In this connection, he submitted that the beneficial valuation allowed under this section would extend even to properties which are meant for residential use, though they may not be actually occupied throughout the previous year. He submitted that on the parallel of section 5(1)(iv) of the Act prior to its amendment with effect from 1-4-1972 which has been liberally interpreted by the various High Courts, this section also should be given a liberal interpretation, so as not to exclude genuine cases. In support, he referred to a number of decisions of various High Courts, some of which are referred to hereunder : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcated and is not capable of such demarcation. Though the Explanation to section 7(4) enlarges the scope so as to include a part of a house but, however, its effect is restrictive inasmuch as, a part of the house should be an independent residential unit. Our attention was also invited to certain observations at the bottom of page 485 in Three New Taxes of Sampath Iyengar 5th edn. All the decisions cited by the assessee relate to interpretation of section 5(1)(iv) whereas under section 7(4) active user for residential purposes for 12 months is an absolute must. 8. We have carefully considered the arguments on either side. Our decision in this case has been made simple for us in view of the decision of the Tribunal, Cochin Bench in H.H. Gouri Lakshmi Bayi's case with which we are in full agreement. Under identical facts and circumstances, the Bench has held that the provisions of section 7(4) would be applicable even in cases where the property may not have been occupied by the owner for the entire period of 12 months. In that case, the assessee had a share in a residential palace but, however, she resided there only on special occasions during the year as she was obliged to stay ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
