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TMI Blog1985 (9) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... plying a certain year's purchase price when its value as on the valuation date can be estimated exactly on land and building method ? 3. Whether the Tribunal in view of the fact that the property did not stand registered in the name of the appellant on the valuation date, there was agreement in the form of a partnership deed to divide the profits and when the right to sell of the appellant was registered was justified in estimating the value of the property at Jhandewalan by applying a multiple of 14 times ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in including the full value of the property at Jhandewalan in the total wealth of the appellant ? 5. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the valuer's report filed by the appellant in respect of her property at Jhandewalan and valuing this property by applying a certain years' purchase?" In this reference, the assessment years involved are 1967-68 and 1968-69. We are concerned with the valuation of the property situate at jhandewalan, Delhi. The assessee, in support of the market value of this property as well as the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d : "The Wealth-tax Officer after considering the entire material on record valued the property by applying the multiple of 16.66 times. The learned Appellate Assistant Commissioner applied the multiple of 14 times. Before us, on behalf of the assessee, no convincing material was brought on record to show that the multiple of 14 times applied by the Appellate Assistant Commissioner was unfair and excessive. Similarly, on behalf of the Revenue, no cogent material was brought on record to establish that the multiple of 16.66 times was fair and reasonable. The learned Appellate Assistant Commissioner considered all the facts and circumstances of the case. In our opinion, the discretion exercised by the learned Appellate Assistant Commissioner is not perverse or not against the facts and the material on record. Thus, in our opinion, the finding of the learned Appellate Assistant Commissioner on this point is quite correct and no interference is called for." While dealing with the contention that the Jhandewalan property did not absolutely belong to the assessee, the Tribunal held that it did belong to the assessee. It, therefore, agreed with the findings of the Appellate Assistant Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (document) dated November 5, 1964, and also the reasons for holding that the assessee was the owner of the Jhandewalan property despite the agreement dated November 5, 1964. We hold that the conclusion arrived at by the Tribunal treating the assessee as the owner of the Jhandewalan property is correct. Question No. 2: For this question, we shall have to notice the relevant, provisions of the Act. "Asset " has been defined in section 2(e) of the Act, as under " (e) `assets' includes property of every description, movable or immovable, but does not include- (1) in relation to the assessment year commencing on the 1st day of April, 1969, or any earlier assessment year- (i) agricultural land and growing crops, grass or standing trees on such land; (ii) any building owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land: Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an out-house; (iii) animals ; (iv) a right to any annuity in any case where the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the valuation date. " In accordance with section 2(9) of the Act, the valuation date in relation to any year for which the assessment is to be made under the Act, means the last date of the previous year as defined in section 3 of the Incometax Act, 1961. There are provisos to this section with which we are not concerned. Section 7 of the Act provides as to how the valuation of assets is to be determined. It is correct that the property was constructed daring November, 1965, and its construction was completed in July and August, 1967. The total covered area of this property was found to be 4,514 sq. ft. The investment made up to the end of the assessment year 1968-69 was Rs. 1,76,414, and the cost of the land was shown separately at Rs. 24,000. This is said to be the admitted market value of the Jhandewalan property, viz., Rs. 2,54,189. It is also correct that the cost of construction was accepted by the Department, but that is only for the purpose of payment of tax under the Income-tax Act. Under the Act, wealth-tax is payable on the net wealth of the assessee and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other modes of determination of the true market value failed or where materials were not available to make a proper determination. The question was again considered in CWT v. V. C. Ramachandran [1966] 60 ITR 103 (Mys), wherein it was held that in the case of buildings with compounds in a city, which were in the possession of tenants and the tenants could not be either evicted or the rent payable by them enhanced except in accordance with the provisions of the Rent Control Act, the only appropriate method of valuation was to capitalise the annual rent by certain number of years' purchase. The Calcutta High Court in CED v. Radha Devi Jalan [1968] 67 ITR 761 (Cal), under the Estate Duty Act, had to consider a similar question with which we are concerned. It was held in that case that in the case of buildings which were in the possession of tenants and the tenants could not either be evicted or the rent payable by them enhanced, except in accordance with the provisions of the Rent Control Acts, the only appropriate method of valuation was to capitalise the annual rent by a certain number of years' purchase. The method of valuing the land and the building separately and adding up the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truction accepted by the Department for the purpose other than for the payment of the wealth-tax under the Act, cannot be taken as the valuation of the property, For this reason, in our opinion, the view taken by the Tribunal regarding valuation of the Jhandewalan property is correct and the question has to be answered in the affirmative. Questions Nos. 3 and 4.-It will be useful to deal with questions Nos. 3 and 4 together. Question No. 3 stands answered by the opinion that we have expressed on question No. 1, for, the assessee is the absolute owner of Jhandewalan property despite the agreement dated November 5, 1964, and 50% of the rent and profits of Jhandewalan property is payable to Nitin Mohan Nagpal, as an overriding charge was created by the agreement. In this view of the matter, question No. 3 has to be answered keeping in view the fact that the assessee is the absolute owner of the property. As stated above, according to the (document) agreement dated November 5,1964, Nitin Mohan Nagpal and the assessee were entitled to share the net profits half and half received out of the properties after payment of taxes and expenses. The assessee did not part with the ownership of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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