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TMI Blog2010 (9) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be determined in accordance with the rules, and not on assumptions, the question of law is answered accordingly and the wealth-tax appeal is dismissed. - IT APPEAL DEFECTIVE NO. 45 OF 2000 - - - Dated:- 21-9-2010 - SUNIL AMBWANI AND KASHI NATH PANDEY, JJ. Shambhu Chopra for the Appellant. S.D. Singh for the Respondent. JUDGMENT 1. Heard Shri Shambhu Chopra, learned counsel for the Department. Shri S. D. Singh appears for the respondent-assessee. 2. In this wealth-tax appeal filed under section 260A of the Income-tax Act, 1961 the Commissioner of Income-tax, Kanpur, has posed a question of law to be decided by the High Court : "Whether the hon'ble Income-tax Appellate Tribunal, in view of rule 14(2)(b) of Part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the assessment under section 16(5) of the Wealth-tax Act, the Assessing Officer found the value of the immovable properties was much more than that what had been shown by the assessee. In view of the valuation report of the approved valuer furnished by the assessee itself, it was held that the fair market value of these properties was Rs. 5,37,55,706 as against Rs. 1,94,52,284 shown by the assessee. These values were arrived at by applying land rates prevailing in that area. 3. Against the order of the Assessing Officer the assessee filed an appeal with the learned Commissioner of Wealth-tax (Appeals). The learned Commissioner of Wealth-tax (Appeals) vide his order dated January 1, 1999, held that these plots of land are business ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable the Assessing Officer to adopt the fair market value of these properties. Further it has been held by the hon'ble Allahabad High Court in the case of Trilok Chand Seth v. Union of India [2000] 244 ITR 658, as under : 'Rule 2A providing for necessary adjustments are per rule 2B(2) when read with the definition of net wealth and section 7 of the Wealth-tax Act, only carries out the purpose of the Act, which is to tax the market value of the asset and not its book value, and therefore, it cannot be said that rules are repugnant and contradictory to the provisions of the Act.' 6. In the above judgment the hon'ble Allahabad High Court followed the decision of the hon'ble Supreme Court in the case of Juggilal Kamlapat Bankers v. WTO [19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice dated March 14, 1996, after many reminders it furnished the area of land, and also a valuation report during the assessment proceeding for the assessment year 1994-95. From these documents he found the valuation of the immovable property for the purposes of assessment under the Wealth-tax Act and issued notices of demand and challan. He also initiated penalty proceedings under section 18(1)(c) and section 18(1)(b). 7. Shri Shambhu Chopra, learned counsel appearing for the Department submits that Schedule III provides for the rules for determining the valuation of assets. Rule 14(2)(b) provides that where the determination exceed, the value arrived at in accordance with clause (a), by more than 20 per cent., in such case the higher val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance-sheet relating to the capital expenditure and depreciation account of Calcutta Electric Supply Corporation Ltd., and was concerned with the deductions in the balance-sheet for the purposes of determining the valuation of the assets. 9. The third case relied upon by Shri Shambhu Chopra Juggilal Kamlapat Bankers v. WTO [1984] 145 ITR 485 (SC) is a case decided by the Supreme Court in respect of the assessment of karta in the status of Hindu undivided family. The Supreme Court held that though sub-section (2) of section 7, commences with a non obstante clause, the provision itself is an enabling one, conferring discretion on the Wealth-tax Officer to determine the net value of the assets of the business as a whole having regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and in any case referred to in clause (a) or clause (b) or clause (c), the value of the property shall be determined in the manner laid down in rule 20." 11. Rule 14(2)(b) provides that where the value of any of the assets referred to in clause (a), namely where the depreciation is admissible or where no depreciation is admissible, its book value, and in case where the closing stock its value is adopted for the purposes of assessment, is determined in accordance with the provisions of this Schedule (the Rules under Schedule III) as applicable to that particular asset, or if there is no such provisions, the value determined in accordance with rule 20 exceeds the value arrived at in accordance with clause (a) by more than 20 per cent, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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