W.T.As. Nos.186/LB to 192/LB of 2000, decided on 25th April, 2002. VS W.T.As. Nos.186/LB to 192/LB of 2000, decided on 25th April, 2002., 2002 PTD-INCOME-TAX-APPELLATE-TRIBUNAL-PAKISTAN 3014 (2002)

(a) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑S.17‑‑‑Finance Act (I of 1995), S.4(6)‑‑‑Wealth escaping assessment‑ Notice‑‑‑Limitation‑‑‑Issuance of notice as on 24‑3‑1997 for assessment years 1990‑91 and 1991‑92 was not barred by limitation‑‑‑Appellate Tribunal declined to agree with the assessee that assessment. for the years 1990‑91 and 1931‑92 had gone times-barred as notice under S.17 of the Wealth Tax Act, 1963 was issued on 24‑3‑1997 when the prescribed time under S. 17 of the Wealth Tax Act, 1963 was 8 years before it was curtailed to 5 years by the Finance Act, 1995 through amendment in S.17 of the Wealth Tax Act, 1963.

(b) Wealth Tax Act (XV of 1963)‑‑‑

‑‑‑‑Ss.2(1)(5)(ii) & 2(1)(16), Expln. (iii)‑‑‑Assets‑‑‑Net wealth‑‑‑Status‑‑ Determination of‑‑‑Construction of commercial building by seven members of a family‑‑‑Share in such property was declared individually‑ ‑Assessing Officer assigned the status of "Association of Persons" and assessed the net wealth‑‑Assessee pleaded that the building was owned by seven persons having their identifiable and separate shares and according to agreement the building had been partitioned and sub‑divided among, the seven co‑owners and the portion of each owner was coded with separate colour, further, the partition of such property had also been accepted by Provincial Excise and Taxation Department and PT‑1 Form in the name of each owner had been separately issued thus, assigning the status of "Association of Persons" was against the provisions of law‑‑‑Validity‑‑‑Seven members joined hand, pooled their sources, got one site plan of a compact multi‑storeyed building approved from the Competent Authority and constructed the building, which was a joint commercial venture of the family and it was an immovable property for the purpose of the business of construction and sale, or letting out; of property‑‑‑All the seven persons had vested right, title or interest; each one of them had a vested interest in each and every inch of the property which was a one unit‑‑‑Shops, apartments etc. in such multi‑storeyed building were being sold through Attorney for all such persons of "Association of Persons"‑‑‑Attorney while negotiating sales did not state in the sale‑deeds that he was acting on behalf of a specific member of the Association of Persons in respect of the sale of a particular shop or apartment being made‑‑‑None of the members had executed sale‑deed independently in respect of the portions within the Plaza to which they claimed specific ownership as per colour coded Annexures with the agreement‑‑‑Building wherein seven persons had vested right, .title or interest would be assessed to wealth tax in the hands of such persons who constituted status of "Association of Persons" under S.2(1)(5)(ii) read with S. 2(1)(16), Expln. (iii) of the Wealth Tax Act, 1963.

1987 PTD (Trib.) 54; 1991 PTD 94; 1992 PTD Note 125 at p.132 = 184 ITR 248; 1984 PTD (Trib.) 157; Commissioner v. O. K. Rmingham 1998, PTD 1787 = 224 ITR 391 1989 MLD 2899 and W.T A. No.333/LB of 1985‑86 irrelevant.

(c) Wealth Tax Rules, 1963‑‑‑

‑‑‑‑R.8(3)‑‑‑Valuation of lands and buildings‑‑‑Commercial building‑‑ Co‑owners‑‑‑First Appellate Authority observed that the valuation of such immovable constructed property could not be made separately for land and the superstructure and it should be made in accordance with R.8(3) of the Wealth 'fax Rules, 1963‑‑‑Assessee contended . that building/plaza should be considered as a stock‑in‑trade and its value declared in the hands of the co‑owners in their individual returns should be aggregated for the purpose of assessment of wealth of the "Association of Persons", and therefore, First Appellate Authority was not justified to give directions for the valuation of building under R.8(3) of the Wealth Tax Rules, 1963‑‑‑Validity‑‑‑For valuation of assets, Wealth Tax Act, 1963 had prescribed its own method in its S.7 namely that the value of any asset, other than cash, for the purpose of Wealth Tax Act, 1963, shall be estimated by the Assessing Officer in accordance with Rules made under S.46 of the Wealth Tax Act, 1963; Wealth Tax Rules, 1963, R.8(3) of said Rules provides detailed workable methodology for working out valuation of property‑‑‑Directions given by the First Appellate Authority while setting aside the case on the point of valuation being in accordance with law, the appellate order did not warrant any interference‑‑‑Order of the First Appellate Authority was upheld by the Tribunal and appeal of the assessee was dismissed in circumstances.

1999 PTD (Trib.) 394 rel.

Ch. Anwarul Haq for Appellant.

Ahmed Kamal, D.R. for Respondent.

Date of hearing: 16th April, 2002.

ORDER

MUHAMMAD SHARIF CHAUDHRY (ACCOUNTANT MEMBER). ‑‑‑These seven appeals have been filed by a Wealth Tax assessee to challenge combined appellate order dated 25‑9‑1999 passed by Commissioner, Income Tax/Wealth Tax Appeal Zone‑IV, Lahore under section 23 of the Wealth Tax Act for the years 1990‑91 to 1995‑96 and 1997‑98. Only two issues have been raised m the rather lengthy grounds of appeal, namely issue of assigning of status of AOP and issue of valuation of building known as Paisa Akhabar Markaz. Both these issues are taken up and decided in the light of the facts available on record and after appraisal of the arguments of the representative of both the parties as under:"

Issue of status:

2. The Wealth Tax Officer has assigned status of AOP to the sever persons who are the owners of building known as Paisa Akhabar Markaz. On the issue of status, the Wealth Tax Officer in his combined assessment order for all the years under appeal, which has been passed under section 16(3) of the Wealth Tax Act on 30‑6‑1999, has made the following observations:

"The facts of the case are that the 7‑persons jointly constructed a huge Plaza at 10‑Paisa Akhbar, Lahore, under the name and style of M/s. Paisa Akhbar Markaz. The site plan of the commercial building was got approved and passed as a single unit and after its completion, the shops and offices were sold out by Lt.‑Col. Abid Rashid Minhas as an Attorney on behalf of all the co‑owners. The property held for the purpose of construction and sale by the above individuals jointly, therefore, stands to be assessed in the status of AOP as per clause (ii) of subsection (5) of section 2 of the Wealth Tax Act, 1963. As such the status in the assessee's case is, therefore, rightly assigned as an AOP."

It was strongly contended on behalf of the assessee during the assessment proceedings before the Wealth Tax Officer that the building known as Paisa Akhbar Markaz is owned by seven persons having their identifiable separate shares and the same is also evident from PT‑I Forms issued by the Excise Department for the purpose of levy of property tax. It was further contended that the name of the each owner is having his separate property number and, therefore, assigning the status of AOP to the assessee was contrary to law and against the facts. However, these contentions of the assessee were demolished by the Assessing Officer on the basis of following reasons:‑‑‑

(1) That the construction of Plaza and its sale is a joint venture of the AOP as is evident from the broucher of the Plaza.

(2) That the sale of shops and offices has been made by Lt.‑Col. Abid Rashid Minhas as an Attorney of all the co‑owners.

(3) That the site plan of the Plaza has been got approved and passed as a single unit and there has been no demarcation or identification of shares of the co‑owners on it.

(4) That the copy of P.T.I. Form discussed by the assessee's A.R. in his letter, dated June 30, 1999 does not relate to the buildings of the Plaza and instead it relates to the properties existed prior to construction of the Plaza. Accordingly, the assessments are being completed in the status of AOP.

3. In the impugned appellate order dated 25‑9‑1999 the learned Commissioner confirmed the status of AOP assigned to the assessee by the Wealth Tax Officer and rejected the appeals of the assessee on this issue. The observations of the learned Commissioner regarding the status of the assessee are as follows:

"A bare perusal of section 2(e)(ii) ‑and explanation of the Board as reproduced above, it reveals that the Assessing Officer has rightly assigned the status of AOP to the assessee. The share of an individual in an immovable property can never be uncertain or unspecific. In this case too the shares may be specific, but all the individuals have made investment jointly in a big building for the purpose of construction, sale and letting out. The property unit though registered in the name of more than one individual, the same is to be treated as a property owned by an AOP and is to be assessed in the hands of AOP for the purpose of charge of wealth tax."

4. The treatment given to the assessee regarding the status of AOP by the Wealth Tax Officer as well as by the First Appellate Authority has been vehemently challenged by the assessee in its grounds of Appeals Nos.2 and 3 which are identical in all the years under question. The contentions raised in these grounds of appeal on the issue of status are given below in the very words of the assessee which read:

"(2) That assigning the status of AOP by the WTO to the building known as `Paisa Akhbar Markaz' owned by the seven persons having their identifiable and separate shares is against the provisions of law. Hence was' not maintainable by the learned CIT (A):

(3) That the building known as `Paisa Akhbar Markaz' is owned by seven persons having their identifiable and separate shares and the same is also evident from the PT‑I issued by the Excise and Taxation record for the purpose of levy of property tax. The name of each owner and his separate property number as mentioned in the Excise record is as under:

5. In support of the contentions raised in the grounds of appeal the AR of the appellant has given detailed and lengthy arguments which are supported with case‑law and certain documents. At the very outset the AR of the assessee has traced the history of the property in question and has submitted that property originally belonged to Molvi Mehboob Alam as per records of 1916‑17. The Molvi Sahib died in 1940 and was succeeded by his two sons Mr. Abdul Maid and Mr. Abdul Rashid. In 1962‑63 Mr. Abdul Rashid died and was inherited by his widow and children. According to him property was partitioned in 1962‑63 between Abdul Majid son of Mehboob Alam and the legal heirs of Abdul Rashid son of Mehboob Alam. The Lahore Municipal Corporation issued notice dated 15‑10‑1984 for demolishing of property as the said property had become dangerous. So, power of attorney dated 26‑9‑1984 was given by the seven successors of the property to Col. (Retd.) Abid Rashid Minhas son of Abdul Rashid Minhas for demolishing it. Decree of vacation against the 84 tenants of the property was obtained by the said attorney. In 1986‑87 two PT‑I Forms were issued indicating property in the name of two sets of owners; three owners in respect of Property No.S‑111‑13- S‑10 and the other set of four owners with the Property No.S.111‑13‑S- 10/1. An agreement dated 12‑10‑1986 was executed by all the owners of the property for constructions of the building under discussion which is named Paisa Akhbar Markaz. In the year 1991‑92 PT‑I Forms were issued in the name of all the seven owners separately. In support of this history of the property the AR has submitted some relevant documents.

He has also submitted a rent deed according to which Azara Qureshi d/o Late Abdul Rashid has rented out apartment No.12 of the third floor of the building under discussion .to Muhammad Nawaz son of Muhammad Siddique.

The AR has read out the relevant portions of the agreement dated 12‑10‑1986 and has contended that the ownership of all the seven co‑sharers in the inherited property was definite and ascertainable. He has specially laid emphasise on the following parts of the said agreement:

"And whereas, the above mentioned owners of the Properties Nos.S-III‑13‑S‑10/1 and S-III-13‑S‑10 have obtained a permission Number 370/D/LMC‑84, dated 29‑4‑1984 from Lahore Municipal Corporation to construct a multi‑storied building under their own arrangement in a manner that each individual owner being directly responsible to construct and defray the cost of construction to the extent of his/her ownership in the said properties. Further sub‑division of the respective properties viz., Number S‑III‑13‑S‑10/1 and Number S‑III‑13‑S‑10, has been made by the respective owners of each party under their own arrangements.

Now this deed witnesseth, as follows:

1. The parties have agreed that their respective properties viz. SIII-13‑S‑10/1 and SIII‑13‑S‑10 situated in Paisa Akhbar Street stands sub‑divided in the attached Annexures `A', 'B' and 'C' by way of colouring their respective portions in exact colour depicted in squares and as printed against their names and signatures in the above mentioned Annexures `A', `B' and `C'.

The parties have authenticated their portions of their properties by affixing their signatures on the Annexures `A', `B' and `C' and have thus agreed that the Annexures shall form part of this Agreement."

The alleged arrangement of partition of the said property, according to the A.R., had been statedly accepted by the Excise and Taxation Department for the purpose of property tax who had issued separate PT‑1 Forms in the names of the owners of the building under discussion. The AR quotes a C.B.R. circular and says that the Government record is final evidence in respect of title of property and, therefore, PT‑1 Forms issued by Excise and Taxation Department in the name of each owner separately should be considered as final authority regarding their title. In the opinion of the AR, the DCWT and the First Appellate Authority have wrongly clubbed all the members of the family in the status of AOP who are owners in the said building separately in respect of their shares. Thus wealth tax has wrongly been charged in respect of the said building in the hands of the seven owners in the status of AOP instead of charging it in the hands of all the owners individually. The AR has also contended that notice under section 17 was issued on 24‑3‑1997 and so proceedings for the years 1990‑91 and 1991‑92 are time‑barred.

In support of his contentions and arguments the AR has relied on the following case‑law:

‑1987 PTD (Trib.) 54.

‑1991 PTD 94 (AOP conditions)

‑1992 PTD Note 125 at p.132 = 184 ITR 248.

‑1984 PTD (Trib.) 157.

‑1998 PTD 1787 = 224 ITR 391

(Commissioner v. O.K. Rmingham)

‑1989 MLD 2899.

regarding non‑registration of family memorandum

-WTA. No. 333/LB of 1985‑86

Unreported case copy already filed.

6. The above mentioned contentions of the appellant and the arguments of his AR have been strongly opposed by the learned DR. According to the learned DR the said agreement dated 12‑10‑1986 has not been registered and only one site plan of the building was got approved through the holder of the general power of attorney. It has been further submitted that the individual members of the AOP are not selling their so‑called separate portions in the Plaza rather the sale is being made through general attorney on behalf of all the owners jointly. The other arguments given by the learned DR are, in fact, the reiteration of the reasons given by the DCWT and the First Appellate Authority for assigning status of AOP in their respective orders, and hence the same need not be repeated.

7. We have gone through the assessment orders of the DCWT and the impugned appellate orders of the learned Commissioner. We have also given careful and anxious consideration to the contentions of both the parties and the views expressed by their authorized representatives during pleadings at the bar. We do not agree with the AR of the assessee that assessment for the years 1990‑91 and 1991‑92 had gone time‑barred as notice under section 17 was issued on 24‑3‑1997 when the prescribed time under section 17 had already expired. For the assessment years 1990‑91 and 1991‑92, rather up to the assessment year 1994‑95, prescribed time under section 17 was 8 years before it was curtailed to 5 years by Finance Act of 1995 through amendment in section 17. Therefore, the plea of the AR on this point is rejected. Before deciding the issue of status, which is the main issue involved in the case, let us examine and discuss the contentions and arguments of the assessee and his AR on this issue as under:

(i) It has been pleaded that the building known as `Paisa Akhbar Markaz' is owned by seven persons having their identifiable and separate shares and so the assigning of status of association of persons is against the provisions of law. No doubt, the shares of the co‑owners in the said building are definite and ascertainable but this does not mean that the co‑owners cannot be assigned the status of an AOP for the purpose of wealth tax under the relevant provisions of law, if the conditions otherwise laid down under section 2(1)(16) Explanation (iii) and section 2(1)(5)(II) of the Wealth Tax Act of 1963, stand fulfilled. To our knowledge, there is hardly an immovable property which is held by two or more persons jointly in which the shares of the owners are not definite and ascertainable. If the contention of the assessee's AR is accepted then the purpose of legislation of above mentioned sections of the Wealth Tax Act becomes a futile exercise because no immovable property can be assessed in the status of an AOP as the shares of the co‑owners in that are always definite and ascertainable.

(ii) The second argument of the AR of the assessee is that the agreement dated 12‑10‑1986 has partitioned and sub‑divided the property known as `Paisa Akhbar Markaz' among the seven co- owners and the portion of each owner is coded with separate colour and, therefore, the said property cannot be assessed in the status of an AOP. If one goes through this agreement, one feels at time as if one were studying a science fiction. Seven colour coded independent portions of one compact multi storied building, each owner made responsible to construct his/her own portion independently at his/her own arrangement. How is it practically possible? The agreement on its plain reading appears to be merely an artificial arrangement just made on paper. The ground realities are that all the seven successors/inheritors of joint property have agreed to construct a joint building on one site plan by pooling their resources. Neither the land on which the said building has been constructed was formally sub‑divided and got registered in the name of the owners separately in Revenue records and Municipal records, neither separate site plans of buildings were drawn and got approved by the Competent Authority. In view of this situation the said property is a joint family venture in which all the co‑owners have joint interest and title. Our this view is supported by a Brochur issued by the owners of the Plaza to promote sale of shops and apartments in the said Plaza, and the sale‑deeds of shops, etc. which are being executed by the attorney holder on behalf of all jointly.

(iii) The A.R. has also stressed that the arrangement of partition of property has been accepted by Provincial Excise and Taxation Department and PT‑I Form in the name of each owner has been separately issued. According to the Wealth Tax Officer these PT‑1 Forms do not relate to the‑present property which is one compact building jointly constructed by all the seven owners on one site plan. Even if these PT‑1 Forms are considered relevant, to the building under discussion, even then these forms hardly lend any support to assessee's contention. The Provincial Excise and Taxation Department is basically entrusted with collection of property tax and excise duty and for this purpose it keeps the record of the properties. But these records do not provide a conclusive and reliable proof in respect of title or ownership of property. Such proof is provided by the records of properties maintained by Revenue Department, Local Government maintained Municipalities and Development Authorities which are produced for Courts to determine the title of properties in case of legal disputes. The Provincial Excise and Taxation Department generally accepts the arrangement suggested by the co‑owners because it is concerned only with collection of property tax.

(iv) Rent deed provided by the AR regarding lease of some apartment of the third floor of the building by one of the co- owners to a tenant does not establish that the portions of the building are separately and independently owned by the co- owners. The rent deed is not a good evidence to prove the title of property as in case of jointly owned properties. it often happens that one of the co‑owners lets out the property For the establishment of title of property, the sale deeds are considered to be a reliable evidence and in the instant case sales of shops and apartments etc. have been made by the power of attorney holder on behalf of the co‑owners jointly and not on behalf of a single co‑owner separately.

(v) Nearly at the close of the proceedings, the learned AR has produced another document i.e. the decree of a Civil Court dated 19‑10‑1961 in support of his contention regarding partition of property. This document was not produced before the DCWT and the First Appellate Authority. However, we have gone through this document. It pertains to the property as it existed in 1961 and is not relevant to the present Plaza which was constructed, as discussed above, by all the co‑sharers jointly after demolishing the old property. Dr. Jahangir Alam had filed civil suit against other co‑owners of the property, which existed in 1961, about the use of corridors, etc. However, all the litigants made a patch up and executed an agreement, hence the Court issued decree on the basis of this agreement. It has nothing to do with the present property and hence it is rejected.

(vi) As discussed in the main body of the order; the AR has produced some case‑law also. Unfortunately, the case‑law produced by the AR relates to income‑tax and not to wealth tax. In income‑tax the concept of AOP is different from that which is applicable to wealth tax. Hence the case‑law produced by the AR is of no help to us in determining the issue under consideration. Even the wealth tax case decided by the ITAT in its judgment dated 1‑9‑‑1993 in W.T.As. Nos.333 and 334/LB of 1985‑86 relating to assessment years 1981‑82 and 1982‑83, which has been quoted by the AR, is not relevant. In the quoted case there, arose a dispute among the three legal heirs about the ownership of the. property and it was agreed upon in writing to refer it to arbitrator. In the light of arbitration award, which was ratified arid made rule of the Court by Civil Judge 1st Class. Lahore and was recorded by Excise and Taxation Department in PT‑1 Forms the legal heirs filed their wealth tax returns separately. But the WTO did not accept the arbitration award and decree of the Court and assessed three persons in the status of AOP. In appeal the learned CIT reversed the order of‑ the Wealth Tax Officer and CIT's decision was confirmed by the ITAT. However, none of these facts of the quoted case are obtaining in the case of the assessee. Hence the judgment of the ITAT is not applicable to the instant case.

8. The definition of AOP, as given in dictionaries or as described in the judgment of the Courts quoted by the learned AR, is not relevant to the issue before us. The Wealth Tax Act, 1963 has introduced its own concept of an AOP in its section 2(1)(16) which is unique and is specific Explanation (iii) of section 2(t)(16) reads:

"Where the right, title or interest to, or in any immovable property other than agricultural land, vests in more than one person, such persons shall, in respect of such property, be assessed as an association of persons and the value of such right, title or interest shall not be included in the net wealth of an individual provided that wealth tax is charged on such right, title or interest."

Thus according to the above mentioned provisions of law, if the right, title or interest to, or in any immovable property (other than agricultural land) vests in more than one person, such persons shall, in respect of such property, be assessed as an association of persons. In plain words, if two or more persons have vested right, title or interest to, or in any immovable property, other than agricultural land, such persons shall be assessed as an association of persons in respect of that immovable property. The concept becomes more clear if we refer to section 2(1)(5)(ii) which defines the word "asset" in the hands of an AOP, firm and company. Section 2(1)(5) reads as under:

"(5) `assets' includes‑‑‑

(i) --------------

(ii) in the case of a firm, an association of persons or a body of individuals, whether incorporated or not, and a company, immovable property held for the purpose of the business of construction and sale, or letting out, of property;"

Reading both the provisions of law reproduced above in conjunction makes the things plain. If two or more persons have vested interest, right, or title to or in an immovable property which is held‑for the purpose of the business of construction and sale, or letting out, of property, then such persons shall be assessed as an AOP to Wealth Tax in respect of this asset of immovable property.

9. Now let us see the position of immovable property, "Paisa Akhbar Markaz". Seven persons, namely; Mr. Amjad Rashid, Lt.‑Col. (Retd.) Abid Rashid Minhas, Dr. Azra Qureshi, Dr. Jehangir Alam, Mr. Habib Alam, Dr. Aftab Alam and Mst. Salama Zafar are the legal heirs of Maulvi Mahboob Alam through his sons Abdul Rashid and Abdul Majeed. They appointed Col. Abid Minhas as attorney and demolished the old building. They joined hands, pooled their sources, got one site plan of a compact multi‑storied building approved from the competent Authority and. constructed the present plaza known as Paisa Akhbar Markaz. This plaza is a joint commercial venture of the family and it is an immovable property held for the purpose of the business of construction and sale, or letting out, of property. In this immovable property, all the seven persons mentioned above have vested right, title or interest. Each one of them has a vested interest in each and every inch of the property which is a one unit. Shops, apartments etc. in this multi storied jointly held Plaza are being sold through Lt.‑Co. (Retd.) Abid Rashid Minhas attorney holder for all these persons of the AOP. The attorney holder negotiates sales and in the sale‑deed he does not state that he is acting on behalf of a specific member of the AOP in respect to the sale of particular shop or apartment being made. None of these persons has executed sale‑deed independently in respect of the portions. within the Plaza to which they claimed specific ownership as per colour coded Annexures with the so‑called agreement of 16‑10‑1986. In view of this situation, the immovable property known as Paisa Akhbar Markaz wherein all the above mentioned seven persons have vested right, title or interest would be assessed to wealth tax in the hands of these persons who constitute status of an AOP under section 2(1)(5)(ii) read with section 2(1)(16), Explanation (iii) of the Wealth Tax Act of 1963.

10. Keeping in view the foregoing discussion we do not feel any hesitation to hold that the status of AOP assigned to the owners of the immovable property known as Pasia Akhbar Markaz has rightly been assigned by the DCWT and it has rightly been confirmed by the First Appellate Authority. We, therefore, dismiss the appeals of the assessee on this issue and confirm the impugned appellate order of the learned Commissioner.

Issue of valuation of building:

11. The Wealth Tax Officer assessed the value of assessee's building known as Paisa Akhbar Markaz on the basis of value of land plus cost of construction. In appeal the learned Commissioner has set aside all the assessments for the years under consideration on the point of valuation and with the directions that fresh assessments should be made in accordance with law and facts. It has been observed by the learned Commissioner that the valuation of assessee's property has not been made by the Wealth Tax Officer properly. Relying on the judgment of the ITAT reported as 1999 PTD (Trib.) 394 the learned Commissioner has further observed that under the rules, the value of immovable constructed property cannot be made separately for land and the superstructure. It should be strictly made in accordance with Wealth Tax Rule 8(3).

12. The action of the learned Commissioner regarding setting aside of the case on the point of valuation has been vehemently challenged by the assessee before us. It ‑has been contended that if the status of the building is accepted as AOP, even then the value of the building would not be assessed at more than aggregate value declared (i.e. stock‑in -trade) in the hands of the said individuals. The AR of the assessee has submitted that the learned Commissioner was not justified to give directions for the valuation of building under rule 8(3) of the Wealth Tax Rules. According to him, the alleged AOP had filed the return under protest declaring nil assets for the assessment years under question in compliance of the statutory notices issued by the Wealth Tax Officer. It never filed any details of construction or any other material during any proceedings under the Wealth Tax Act and, therefore, observations made in the notice vide No.435/06, dated June 5, 1999 is totally misconceived. In the opinion of the AR, the method of valuation of his client's buildings as adopted by the Wealth Tax Officer as well as by the learned Commissioner is contrary to facts and illegal. According to the AR all the members of the so‑called AOP have submitted their wealth tax returns declaring the value of their respective shares in their individual hands and the aggregate of the same should be adopted for the purpose of assessment of the AOP.

13. We have considered the contentions of the assessee and the arguments of the AR on the issue of valuation of assessee's building. We do not agree with the AR of the assessee that the said building should be considered as stock‑in‑trade and its value declared, in the hands of the co-owners in their individual returns should be aggregated for the purpose of assessment of wealth of the AOP. For valuation of assets Wealth Tax Act, 1963 has prescribed its own method. Section 7 of the Wealth Tax Act prescribes that the value of any asset; other than cash, for the purpose of this act, shall be estimated by the Deputy Commissioner in accordance with Rules made under section 46 of the Act. Such rules have been made and the same are known as Wealth Tax Rules of 1963. Rule 8(3) of these Wealth Tax Rules deals with the method of valuation of immovable properties of the taxpayers according to this rule, the value of lands and buildings (excluding agricultural land) shall be estimated with due regard to nature and size of the property, the amenities available and the price prevailing for similar property in the same locality or in the neighbourhood of the said locality. Proviso first to this rule, however, requires that value of a property ether than and open plot of land shall not be made by the Wealth Tax Officer at a sum higher that 10 times the gross annual rental value of such property except with their prior approval of the Commissioner. The ITAT has interpreted this rule in its judgment reported as 1999 PTD (Trib.) 394. It has been held that in the case of a constructed property, the said rule does not provide for valuation of plot and building thereon separately. The valuation should be made with due regard to the nature and size of the property, the amenities available and the price prevailing far similar property in the same locality or in the neighbourhood of the said locality, but the value so assessed should not exceed 10 times of the gross annual rental value of the said property except with the prior approval of the Commissioner. In the nutshell the theme of this judgment as well as many other reported and unreported judgments of the ITAT is that in the case of an immovable constructed property, value should be assessed keeping in view the ALV of such property. Since the directions given by the learned Commissioner while setting aside the case on the point of valuation are in accordance with law, so the impugned appellate order does not warrant any interference. It would be, therefore, most appropriate if we uphold the impugned appellate order of the First Appellate Authority on the issue of valuation of assessee's property and dismiss the appeals filed by the assessee.

14. Consequently all the appeals filed by the assessee fail.

C.M.A./M.A.K./444/Tax(Trib.) Appeals failed.