TMI Blog2003 (11) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-2003 - Judge(s) : R. JAYASIMHA BABU., S. R. SINGHARAVELU. JUDGMENT The judgment of the court was delivered by R. JAYASIMHA BABU J.-Three questions arise in this batch of references and appeals. The first two arise for the assessment years 1984-85, 1985-86, 1987-88, 1988-89 and the third for the assessment years 1988-89, 1990-91 and 1991-92. The three questions are: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in rejecting the assessee's contention that the property at No. 17, Greams Road, Madras, should be valued on the basis of rent capitalisation method for determining the taxable wealth under the Wealth-tax Act? (2) Whether, on the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial was required to be valued at the rate at which the compensation is provided for lands in terms of the Urban Land Ceiling Act. The property at No. 17, Greams Road, has an extent of 31 grounds and 1,820 sq. mt. The building with an area of about 1,394 sq. mt. is situated in an area of 8.75 grounds. In respect of that building and the ground on which it rests, the Commissioner upheld the method adopted by the Assessing Officer, viz., "land and building method", for determining the market value. The Tribunal has affirmed the order of the Commissioner. It is contended for the assessee that having regard to what is provided in Schedule III the only permissible method of valuation was the "rental method" so far as the building is concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e modes and the prescription by the Legislature of that mode of valuation being a procedural prescription would apply to these assessment years as well submitted that having regard to rule 8 of Schedule III, rule 3 would not apply. Rule 8 in clause (a) provides that where it is found by the Assessing Officer with the previous approval of the Deputy Commissioner, that it is not practicable to apply the provisions of rule 3 of that rule is not to be applied. There is, however, nothing in the order of the Assessing Officer or the other authorities to show that it was not practicable to apply the rental method. The finding of the authorities on the other hand, is that there has been letting and that the assessee has been receiving rents, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ominal, it would not be open to the Assessing Officer to decline to adopt the rental method. The prescription made by Parliament binds the Assessing Officer as much as it does the assessee. Section 3 of the Act provides for levy of wealth-tax in respect of the net wealth on the corresponding valuation date. For the purpose of determining that net wealth in respect of certain assets the mode of valuation of those assets is also provided for in the Act. The computation of wealth, therefore, has to be in accordance with the mode of valuation set out in the Act. The mode of valuation set out in Schedule III does not provide for a situation where the rent actually received by the assessee is in the view of the Assessing Officer, nominal. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be. The Supreme Court, in the case of F.S. Ghandhi v. CWT [1990] 184 ITR 34, in a situation substantially similar to the one in which the assessee is placed, held that the continued possession of the property by the lessee after the expiry of the lease period, against the wishes of the lessor, was precarious and it could not be said that such a person had a vested interest in the land and would not fall within the scope of section 2(e)(2)(iii) of the Wealth-tax Act. The statutory provision applicable in this case also is section 2(e)(2)(iii) which refers to interest in property vesting in the assessee for a period exceeding six years. In the absence of any renewal and in the face of the demand by the lessor for possession-a claim which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
