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TMI Blog1989 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 1974-75. The assessee is a partner in the firm, S. Zoraster and Co., at Jaipur and has a one-third share therein. Among the assets owned by the said firm is a cinema building known as Prem Prakash Talkies at Jaipur. The assessee, in his return, declared the value of the said cinema building as Rs. 21,16,050. The Wealth-tax Officer, while working out the value of the share of the assessee in the firm, S. Zoraster Co., has adopted the value of the cinema building at Rs. 42,92,000, on the basis of the report of the Valuation Officer. The Valuation Officer had valued the cinema building on the basis of the income capitalisation method without giving deduction for salary of the partners, interest on their capital, and the risk undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al held that while valuing the cinema building on the basis of the income capitalisation method, deduction had to be given from the net profits as shown in the profit and loss account for salary of partners, interest on their capital and the risk undertaken in running the cinema, etc., and that considering all these and also after including the reversionary value of the land on which shops have been constructed and after capitalising the net income from the cinema as, according to the profit and loss account, the profit would be in the range of Rs. 1 lakh or little over that. According to the Tribunal, the value of the cinema building would be only Rs. 12 lakhs (even taking a multiplier of 12 times of the income of Rs. 1 lakh) and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of salary or interest is incurred, it does not mean that, for the purpose of arriving at the net income of the person for determination of the net value of the property, no deduction should be allowed. The Judicial Member of the Tribunal has, however, appended a separate note wherein he has observed that the method of valuation of a particular building is certainly a question of law and whether the building should be considered to be the assessee's business assets or otherwise is again a question of law and it would have been safer to submit rather than to withhold its reference. The learned Member has observed that he did not propose to make it a third-member case inasmuch as the Department could move the High Court under section 27(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ema building on the basis of the income capitalisation method, the Tribunal has erred in giving deduction from the net profit as shown in profit and loss account for salary of the partners, interest on their capital and the risk undertaken to run the cinema. The submission of Shri Singhal is that, under section 7 of the Act, the Wealth-tax Officer is required to compute the market value of the asset. Shri Singhal has also urged that the Tribunal has erred in applying the principles relating to computation of bonus under the Payment of Bonus Act and in allowing deduction in respect of the salary paid to the partners and interest on their capital and in permitting deduction in respect of the risk undertaken by partners. Shri Ranka, learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that both these questions cover the same field as to whether the cinema building known as Prem Prakash Talkies is a business asset and is liable to additional wealth-tax under the Act. Shri Singhal has urged that the Tribunal has erred in treating the cinema building as a business asset on the erroneous assumption that the entire cinema building excluding the shops constructed on the left portion is being used for the exhibition of films. Shri Singhal has pointed out that inside the cinema building also there are premises which have been let out and are not being used for the business of exhibition of films. In support of his aforesaid submission, he has referred to the report of the Valuation Officer (on which reliance was placed by the W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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