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2012 (6) TMI 424 - AT - Wealth-taxValuation of property under Schedule III of the W.T. Act – bifurcation of rateable value into two parts viz, legal occupants and illegal occupants – Held that:- action of the CIT(A) in bifurcating the maintainable ratable value and attributing part of it to legal occupation and illegal occupation is not within the frame work of Rule 5(i) of the Act. As we have already seen wealth tax is levied on the net wealth on the corresponding valuation date. Net wealth in turn is defined to mean the aggregate value of assets owned by the assessee after reducing debts owed in relation to those assets by the assessee. Thus ownership of the property and the fact that it is a let out property is relevant criterion and illegal occupation of the property or actual rent received from lawful tenants all becomes irrelevant. Proceedings under the Income Tax Act for determining income from house property are different and that yardstick cannot be applied in proceedings under the W.T. Act. In terms of Rule 4 the assessee will be entitled to deduction on account of taxes levied by Local Authorities and 15% of GMR. The resultant figure will be NMR which is to multiplied by 12.5 to arrive at the value of the property. Basis of determining by the AO of the value of the property at Rs.5,24,61,625/- based on the Income Tax proceedings cannot be sustained as it was based on erroneous claim made by the Assessee while filing its return of wealth. Order of CIT(A) set aside.
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