9911796707
TMI Blog1986 (7) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... riginally on 1-8-1979, the assessee filed his return declaring net wealth at Rs. 2,87,100. Thereafter, on 25-3-1983, he filed a revised return declaring net wealth at Rs. 1,99,100. This return was accompanied by an approved valuer's report valuing the plot in the New Brahmakshatriya Co-operative Housing Society Ltd. at Rs. 1,02,000 and the plots in Samasta Brahmakshatriya Co-operative Housing Society Ltd. at Rs. 58,500. Thus, the total value of all the three plots is Rs. 1,60,500. The assessee's one-fourth interest in the said plots is, therefore, Rs. 40,125. On 28-12-1983, the assessee filed yet another revised return declaring net wealth at Rs. 1,63,980. In his letter dated 13-2-1984 addressed to the IAC, the assessee took up a stand that since his valuer has not properly considered various restrictions contained in the bye-laws of the two societies, his one-fourth interest valued at Rs. 40,125 was not proper. According to the assessee, only the deposits amounting to Rs. 20,000 made with the societies could be considered as an asset for the wealth-tax purposes. Since he had one-fourth interest in such deposits, only Rs. 5,000 could be included in his net wealth. Reliance was plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee contended that the provisions of the said section would be applicable only in a case of a co-operative housing society. For this purpose, he asserted the words 'not being a co-operative housing society' mentioned in parenthesis in section 4(1)(b) would take out the case of a co-operative housing society from the application of that section. Again, since in the instant case, there are open plots of land, he went on to argue that even the provisions of section 4(7), would not be attracted as the said provisions talk of a situation of a building or a part thereof allotted or leased to an assessee under a house building scheme of the society. He, therefore, forcefully argued that nothing could be added in the net wealth of the assessee in respect of the right in the said plots of land. Even assuming for the sake of argument that this stand of the assessee was not acceptable, the learned counsel for the assessee submitted that since the societies in question are mutual associations, the assessee's interest in the plots of land cannot be included in the net wealth. Even assuming for the sake of argument that this stand of the assessee was also not acceptable, the learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts ? They informed the appellant that the matter being old they could not tell him the exact amount but informed him that they were sure that valuation share shown in the valuation report was taken. There was no change in the share shown. Side by side they did not take up any plea about the non-taxability of share of valuation of open plots in two co-operative housing societies as being agitated by the appellant." At the time of hearing, the learned counsel for the assessee also stated that even though the tax effect involved in the present appeal is very very small (Rs. 627), the assessee has filed this appeal as the decision on the point involved has a far reaching effect in the State of Gujarat where the buildings are constructed by the members of the co-operative housing societies. It may be mentioned here that the assessee has filed written submissions wherein, apart from relying on the aforesaid decision in the case of Sakarchand Chhaganlal he has referred to the decisions---[1965] 2 Andh. WR. 229 and 20 ILR 878. However, copies of the same have not been supplied. 8. The learned representative for the department, on the other hand, strongly supported the order of the wea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states as under: New Brahma Kshtriya Co-operative Society "The sub-plot No. 23 admeasuring 1681 sq. yds., is in the joint ownership of Shri Jagdish Bhimrao Setalvad and others." Samast Brahma Kshtriya Co-op. Society "Sub-plot No. 77 is admeasuring 703.44 sq. mts. (841 sq. yds.) is in the joint ownership of Shri Dushyant Bhimrao Setalvad and Shri Kishore Kumar Bhimrao Setalvad. Similarly, sub-plot No. 78 admeasuring 703.44 sq. mts. (841 sq. yds.), is in the joint ownership of Shri Jagdish Bhimrao Setalvad and Kirankumar Bhimrao Setalvad." From the above, it is very clear that a proper lease has been executed between the assessee, his brothers and the two societies in question. It may be true that the ownership of the plots in question may vest in the two societies. However, we cannot lose sight of the fact that the plots in question has been leased to the assessee and his brothers for 998 years. In this background, one has to determine the value of the assessee's interest in the plots of land in question. We have carefully gone through the bye-laws of the two societies and are of the views that it is difficult to hold that the assessee had no interest in the plots of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75 per sq. yd. The Samasta Brahma Kshtriya Co-operative Housing Society is a registered co-operative housing society under the Bombay Co-operative Societies Act of VII, 1925. One of the rules of this housing society stipulated that when any member of the plot holder of the society disposes of his plot by a sale, the plot holder shall have to pay 50 per cent of his profit in land to the society. The plots under reference, viz., 77 and 78 were purchased by the owners in the year 1947-48 at the land rate of Rs. 7.00 per sq. yd., i.e., Rs. 8.40 per sq. mt., i.e., at a total amount of Rs. 11,774 for both the plots. The present day value at the rate of Rs. 75 per sq. mt. for the total area of 1,406.88 sq. mts. (1,682 sq. yds.) works out to Rs. 1,05,516.00. The difference of the two is the profit, viz., Rs. 93,742 and 50 per cent of it, i.e., Rs. 46,871 will go to the society and remaining 50 per cent along with the original purchase price will be the value of the plot, which comes to Rs. 58,645 say Rs. 58,500 (Rupees Fifty-eight thousand five hundred only)." It would be apparent from the aforesaid reports of a technical man that there is no total ban in transferring the plots of land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event of dissolution of the association or in the absence of such agreement in the proportion in which the members are entitled to share the profits. The sum total of the amounts so allocated to a member shall be treated as the value of the interest of that member in the association. 10. We entirely agree with the submissions made on behalf of the assessee that since in the instant case, we are not dealing with a building or part thereof, the provisions of section 4(7) would not be applicable. However, that fact by itself would not absolve the assessee in not showing any value of his interest in the plots of land in question. We have come to this conclusion on the proper construction of section 4(1)(b) and (7). If a co-operative housing society is having a building then, the provisions of section 4(7) would be applicable. However, if a co-operative housing society is having plots of land as in the instant case, then, such case would fall under section 4(1)(b). As noted above, section 4(1)(b) takes us to rule 2. Since the co-operative societies have given on lease the plots of land in question to the assessee for 998 years, as per rule 2, we have to value the plots of land in que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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