SIMPSON & CO. LTD. VS COMMISSIONER OF WEALTH TAX
2001 P T D 853
[241 I T R 620]
[Madras High Court (India)]
Before R. Jayasimha Babu and N. V. Balasubramanian, JJ
SIMPSON & CO. LTD.
versus
COMMISSIONER OF WEALTH TAX
T.C.P. No.832 of 1997, decided on 25/06/1998.
Wealth tax‑‑‑
‑‑‑‑Reference‑‑‑Valuation‑‑‑Land exempted from Urban Land Ceiling Act‑‑ Need not be valued on basis provided under Urban Land Ceiling Act‑‑‑No question of law arises‑‑‑Indian Wealth Tax Act, 1957, S.27(3).
Held, that the standard adopted to value the property under the provisions of the Urban Land Ceiling Act could not be adopted to determine the market value, There was no dispute that the properties were exempted from the operation of the provisions of the Urban Land Ceiling Act by a Government order and the valuation of a property exempted from the purview of the ceiling law could not be made on the same basis as the valuation adopted to value the land within the ceiling level. The Tribunal took note of the restriction imposed in the Government order on the alienation of the lands and upheld the deduction of 10 percent. in the total value of the property determined by the wealth tax authority. That apart, the question of valuation was a pure question of fact and there was no error in the principles of valuation adopted by the Tribunal in upholding the valuation of the land.
CWT v. K.S. Ranganatha Mudahar (1984) 150 ITR 619 (Mad.) ref.
P.P.S. Janardhana Raja for the Assessee.
C.V. Rajan for the Commissioner.
JUDGMENT
N.V. BALASUBRAMANIAN, J.‑‑‑This is a petition by the assessee to direct the Income‑tax Appellate Tribunal to state a case and refer the following questions of law under section 27(3) of the Wealth Tax Act, 1957, in respect of valuation of the land for the assessment year 1988‑89:
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the valuation of the land of the assessee at Sembium and Madhavaram?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the land at Sembium and Madhavaram which are the subject‑matter of acquisition under the Tamil Nadu Urban Land Ceiling Act should not be valued as per the compensation payable under the Act, as held by the Madras High Court in the case reported in CWT v. K.S. Rangantha Mudaliar (1984) 150 ITR 619?"
The assessee admittedly is the owner of the land situated at Madhavaram and Sembium. The Assessing Officer estimated the value of the property at Madhavaram at Rs.2,50,94.056 and that at Sembium at Rs.68,20,832. The Appellate Assistant Commissioner gave a reduction of 10 percent. when the valuation of the two properties was challenged before him. The Appellate Tribunal, on appeal, by the assessee, rejected the contention of the assessee that the value of the properties should be made on the principles adopted under the relevant ceiling law. The Tribunal found that the property in dispute was exempted from the provisions of the Urban Land Ceiling Act by virtue of the order of the Government of Tamil Nadu and since the properties were exempted from the provisions of the Urban Land Ceiling Act, the Tribunal held that the property need not be valued on the basis provided under the Urban Land Ceiling Act. The Tribunal also found that a discount of 10 percent. was given on the market value of the property and that would be sufficient to take care of the restriction imposed by the Government on alienation of property by the assessee. The Tribunal ultimately held that the value adopted by the Commissioner of Wealth Tax was justified and dismissed the appeal. The assessee which was unsuccessful before the Tribunal in getting a reference, has filed the present petition for direction.
We are of the opinion that the Tribunal has come to the correct conclusion in holding that the standard adopted to value property under the provisions of the Urban Land Ceiling Act cannot be adopted to determine the market value. There is no dispute that the properties were, exempted from the operation of the provisions of the Urban Land Ceiling Act by a Government order and the valuation of a property exempted from the purview of the ceiling law cannot be made on the same basis as the valuation adopted to value the land within the ceiling level. The Tribunal took note of the restriction imposed in the Government order on the alienation of the lands and upheld the deduction of 10 percent. in the total value, of the property determined by the wealth tax authority. That apart, the question of valuation is a pure question of fact and there is no error in the principles of valuation adopted by the Tribunal in upholding the valuation of the lance. We are, therefore, of the opinion that the question sought to be raised is a pure question of fact and, accordingly, the tax case petition is liable to be dismissed.
In the result, the tax case petition is dismissed. The Revenue is entitled to costs of a sum of Rs.500.
M.B.A./412/FCPetition dismissed.