TMI Blog1994 (6) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... on of property consisting of residence-cum-nursing home at Mission Compound, Saharanpur. The ground floor is used by the assessee for her Nursing Home and the first floor occupied by her for her residential purposes. The value declared and the one determined by the authorities below for all these years are as under :-- Value declared Value assessed 1983-84 Rs. 1,90,100 Rs. 7,23,576 1984-85 Rs. 1,90,100 Rs. 7,76,653 1985-86 Rs. 1,90,100 Rs. 8,54,124 1986-87 Rs. 1,90,100 Rs. 9,06,616 While the value declared by the assessee for all these years was on the basis of cost of construction, the value adopted by the Wealth-tax Officer was based (in the valuation report of the Valuation Cell, to which the case was referred by the WTO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tute, though later, are beneficial to the assessee and hence should be made applicable to her case. The entire property should be valued as per the formula laid down in Schedule III of the Act. 4. The learned Departmental Representative opposed the stand taken by the learned counsel for the assessee. It was argued that Schedule III was inserted in the Act with effect from 1-4-1989 and as such could not be made applicable to the pending assessments. Any provision of law which affects the vested interest of the parties could not be applied with retrospective effect. As even rule 1BB was not applicable to the case of the assessee in respect of the self-occupied portion, the question of applicability of Schedule III did not arise. 5. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation provided in the Schedule is based on the existing rules with certain amendments which have been proposed in order to simplify and rationalise the procedures." In a press note issued by the CBDT dated 27th January, 1989, the salient aspects relating to the new valuation rules were explained. It was explained that as concept of market value gives rise to considerable uncertainty in the matter of valuation, the rules for valuation of most of the assets would be incorporated in the Wealth-tax Act itself instead of their being in the Rules. It was also mentioned that the principles built into the existing Rule 1BB of the Wealth-tax Rules is proposed to be incorporated in the Wealth-tax Act to give the identical base to the properties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdships of Allahabad High Court in the case of Govind Hari Singhania's case, without going into the retrospectivity of Schedule III have nonetheless observed that the difference between Rule 1BB and that of Schedule III is not substantial one. As per their observations to quote "Thus we are unable to see any substantial or qualitative difference between Rule 1BB and the Rules contained in Part B of Schedule III to the Act in so far as valuation of a house occupied by the owner himself is concerned." 6. Even if it is held that Schedule III is not applicable to the case of the assessee to whom rule 1BB was not applicable in respect of the portion occupied for self-residence, the issue still remains as to how to arrive at the true net value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the appropriate one to arrive at the correct value. The only method than left is Rent Capitalisation method which has been given recognition to in Schedule III of the Wealth-tax Act. Following the decisions of various Benches of the income-tax Appellate Tribunal as cited by the learned counsel for the assessee, and also finding that on merit Land Building method is not suitable in the case of the valuation of the property owned by the assessee, we hold that the same should be arrived at by applying Schedule III of Wealth-tax Act. While applying Schedule III for arriving at the valuation of the property, we however, hold that the Wealth-tax Officer is also empowered to apply Rule 8 contained in Part B of Schedule III of the Act, if he fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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