TMI Blog1972 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Officer was of the view that the capital value returned by the assessee represented only the value of the building and five grounds of land which was necessary for the convenient occupation and enjoyment of the building, and that the balance of 13 grounds of land should be treated as surplus vacant site and that the appreciated market value of the said excess extent should be added to the capital value returned by the assessee. The Wealth-tax Officer, valued the alleged excess land of 13 grounds at Rs. 52,000 at the rate of Rs. 4,000 per ground, and determined the total value of the premises at Rs. 1,45,560. The assessee took the matter in appeal to the Appellate Assistant Commissioner and contended that the value returned by him represented the rental value of the entire property including the vacant site and that there was no justification for separately valuing the vacant site alleged to be in excess of the land required for the convenient occupation and enjoyment of the building and adding the value of such vacant site to the value returned by him. The Appellate Assistant Commissioner accepted the said contention of the assessee and held as follows: " In a property let ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the rental value on the basis of which the assessee had valued the property represents the rental value only of the building and it does not represent the rental value of the entire vacant site on a portion of which the building stands. Although it is the assessee's case that he has let out not only the building but also the entire site to the Government on a monthly rental of Rs. 600 he has, however, not produced any evidence to prove that it was not only the building that was let out to the Government, but also the entire vacant site. The fact that the assessee himself does not derive any benefit from the vacant site is not a relevant consideration. Since the Government has taken the building for housing one of its offices, namely, the sales tax office, it would be reasonable to conclude, in the absence of evidence to the contrary, that it was only the building that the Government had taken on lease. The annual rental value calculated on the basis of the monthly rent of Rs. 600 paid by the Government cannot obviously represent the annual rental value of the entire property including the vacant site." From the extracts given above, it is clear that the Tribunal has proceede ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. In this case the Wealth-tax Officer did not go into the question as to whether the lease in favour of the Government of Madras was in relation to the entirety of the premises. He proceeded to consider, without reference to the subject-matter of the lease, the question as to whether the entire extent of 18 grounds is necessary for the convenient enjoyment of the building and held that the land on which the building stands and the land immediately appurtenant to the building of an extent of five grounds is sufficient for the convenient occupation of the building and that the remaining thirteen grounds of vacant site should be treated as a separate unit and assessed on the basis of its market value. According to the Wealth-tax Officer the capitalised value being 20 times of the annual rental, value should be taken to relate only to the building and the five grounds of land appurtenant thereto, and the remaining vacant site of thirteen grounds should be separately valued on the basis of its market value. The Appellate Assistant Commissioner, however, proceeded to assume that the rent received by the assessee was in respect of the entire premises as the revenue has not shown th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Wealth-tax, this court considered the scope of section 7(1) of the Wealth-tax Act and also the Circular No. 3 W.T. of 1957, dated September 28, 1957, of the Central Board of Revenue directing the Wealth-tax Officer to determine the actual value by multiplying the annual value by 20 times and expressed the view that the formula of multiplying the annual value by 20 times can be resorted to only if the market value is not easily ascertainable by other methods or where sufficient materials are not available to make a proper determination and that this mode of valuation should be the last resort and should not be the first to be adopted in preference to every other mode of valuation. It was also held in that case that as the Wealth-tax Act levies a tax only on the net wealth of an assessee, to be determined according to the provisions of the statute, the burden is on the taxing department to find out the true net value assessable and that even if the assessee has overvalued, the department must make an effort to determine the true market value. In Commissioner of Wealth-tax v. V. C. Ramachandran, the question of valuation of houses let out to tenants in the city of Bangalore where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay that the inference drawn by the Tribunal that as the lease is in favour of the Government it should be a lease of building alone is correct. As has been expressed in Kanagasabapathy Pillai v. Commissioner of Wealth-tax the burden is an the revenue to find out the true net value assessable and the revenue has to make an effort to determine the true market value irrespective of the stand taken by the assessee. In this case, the assessee has contended that the lease is of the entire premises. The Wealth-tax Officer did not advert to that question but proceeded on the basis that five grounds of land is sufficient for the proper and reasonable enjoyment of the building and the rest should be treated as a separate unit for the purpose of valuation. The appellate authority, however, said that in the absence of any evidence that the lease was restricted to the building, it must be taken that the lease was in respect of the entire premises. The Tribunal, however, inferred that the lease should be only of the building from the mere fact that the lease was in favour of the Government. If the assumption of the Tribunal that the lease was in relation to the building alone and that the rent r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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