9911796707
TMI Blog1984 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... und in law, particularly in view of the fact that the assessee himself valued the property for the purpose of wealth-tax as on January 31, 1957, at Rs. 2,50,000 justifying the same on the ground that the building was under rent control and the property not having been released throughout ? " The assessee owned a cinema hall, which is on the first floor of the building, and some shops in the ground floor. The entire property was known as " Sagar Talkies ". During the previous year relevant for the assessment year 1967-68, it appears, the assessee sold the entire property for Rs. 5,00,000--the property consisting of the Sagar talkies cinema building, machinery, furniture and fittings and the shops in the ground floor. In the return filed, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction. After examining the working sheet given by the chartered accountant, the Income-tax Appellate Tribunal came to the conclusion that in any event, the value of the entire asset as on January 1, 1954, could not be less than Rs. 5,00,000 and, therefore, there could be no question of assessment to capital gain or profit under s. 41(2) of the Act. In arriving at the above conclusion, the Tribunal took into consideration the fact that the rent of the Sagar talkies was cut down from Rs. 2,600 to Rs. 1,450 per month by the Rent Controller during the year 1956. The Tribunal determined the value as on January 1, 1954, based on the monthly rent of Rs. 1,450 determined by the rent control authorities. As regards, the apportionment of the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and the tenants cannot be evicted except in accordance with the provisions of the Rent Control Act. The Tribunal followed this well-recognised principle of valuation and we are unable to state that there is any error in the principle followed by the Tribunal in determining the value with reference to the above principle. Coming then to the second question , whether the Tribunal was correct in holding that the value of the whole property could be taken to be not less than Rs. 5,00,000 as on January 1, 1954, when the assessee herself declared the value of the property for the wealth-tax assessment year 1957-58 at Rs. 2,50,000, we do not find any error, prima facie, in the Tribunal's conclusions. In the first place, we are unable to get th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder s. 45 of the Act. It seems to us that the authorities below did not give proper attention to determine the figures of written down value, etc., with reference to the past record. We are unable to understand how profit under s. 41(2) could be considered as " nil " if depreciation was actually allowed to the assessee on the assets unless the sale price is less than the written down value. There is not even a mention in the record regarding the extent of depreciation that was allowed in the past years and on what basis the authorities below came to the conclusion that even to the extent of depreciation allowed no profit could be assessed under s. 41(2) of the Act. As already stated, there is a handicap in appreciating the facts in the abs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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