TMI Blog2011 (9) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... the property after purchase. The AO has mentioned that at present i.e. on the date of making assessment order, the property is known as Datta Arcade, a commercial complex. Certain shops located in this complex have been sold out. From this, the AO inferred that property was purchased for commercial purposes. The AO has mentioned that size of the plot is north 81 ft , south 99.4ft east 163 ft and west 182 ft. According to the AO, the total area is 1990.5 Sq. Yds The property is in the joint name of Shri Niranjan Lal and Smt. Nirmala Devi. Both the persons are having equal shares. The AO applied the DLC Rate of ₹ 21450/- per Sq. Yd and accordingly the value of the property was determined at ₹ 4,26,96,225/-. The assessee is having share and therefore, the value of the property to be considered in the hands of the assessee was taken at ₹ 2,13,48,113/-. 2.4 Before the ld. CIT(A), it was submitted that the property was used for residential purposes and was declared as a residential property in the wealth tax proceedings of earlier years. In respect of this property, the ld. CWT(A) while deciding the appeal for the assessment year 1988-89 held the same as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et by applying the commercial rates. The appellant has claimed that the asset being a house should be exempt within the meaning of Section 5(1)(vi) of the Wealth Tax Act , 1957, which have been claimed as such, in the return of wealth and, also born from the assessment order. Having regard to these discussions, and bearing in mind the entirety of the case, I am of the considered view that the assessee is entitled to claim the said house as exempt within the meaning of Section 5(1)(vi) of the Wealth Tax Act, 1957. Therefore, it is directed to delete the addition of ₹ 2,13,48,113.00 from the total/ net wealth of the appellant, thus this ground of appeal is allowed and the assessee will get the necessary relief. 2.6 Before us, the ld. DR referred to the order of the AO. It was stated that the property was actually a plot. The property subsequently has been utilized for commercial purposes. The AO has rightly valued the property in the hands of the assessee at ₹ 2,13,48,113/-. 2.7 The ld. DR has relied upon the decision of ITAT Hyderabad bench in the case of ACWT vs Hyderabad Industries Ltd. 281 ITR (AT) 31. In the case before Hyderabad Bench, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year s under consideration. Upto assessment year 2002-03, the property was a residential property on which assessee is entitled to deduction u/s 5(1)(vi). 4. In case of co-owner, Shri N.L. Data, no appeal is filed by the Department against deletion of addition. 2.9 We have heard both the parties. The AO has determined the value of property by applying the DLC Rate. The DLC Rate can be useful to ascertain the value but it cannot be the sole basis. The size and location of the property is also relevant to ascertain the value of the property. It has been noticed that the AO has adopted the same valuations for the assessment years 1998-99 to 2002-03 by adopting the same DLC Rate. We are not aware about the date from which DLC Rate adopted by the AO was effected. Under Section 7 of the Wealth Tax Act, the AO is required to value the property as on the valuation date. The valuation of immoveable property cannot be the same for all the 05 assessment years. The valuation of the property under reference has been considered by the ld. CWT(A) and the Tribunal for the assessment year 1986-87 to 1988-89. The value of this property was adopted at ₹ 2.00 lac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the house includes school, factories and other buildings. The ordinary meaning of house as given in the Law Lexicon is as under:- The word House clearly means a building in ordinary sense of the word and such building needs not necessarily be always for the habitation of man or beast. The sale deed of the property clearly indicates that there was a construction on this property. Upto assessment year 1988-89, the valuation has been done as per Rule 1BB of the Wealth Tax Act which means that the property was considered as a house. We are not having the benefit of going through the map of this property. Rule 6 of Schedule III provides adjustment to value arrived at under Rule 3 for un-built area of plot of land. No adjustment is required to be made in case the un-built area is less than 70% of the aggregate area. If it exceeds the specified area then adjustment is to be made. Considering Rule 6 of Schedule III, we hold that the constructed area plus 70% of the aggregate area will be covered u/s 5 (1)(vi) of the Wealth Tax Act. If un-built area exceeds this specified area i.e. 70% of un-built area then such part of the land will be taxable as urban land ..... X X X X Extracts X X X X X X X X Extracts X X X X
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