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TMI BlogInsertion of new Schedule IIIX X X X Extracts X X X X X X X X Extracts X X X X ..... form of a purity of not less than nine carats and includes any gold coin (whether legal tender or not), any gold ornament and other article of gold; (5) "gold ornament" means any article in a finished form, meant for personal adornment or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from, gold, whether or not set with stones or gems, real or artificial, or with pearls, real, cultured or imitation, or with all or any of them and includes parts, pendants or broken pieces of gold ornaments; (6) "investment company" means a company whose gross total income consists mainly of income which is chargeable to income-tax "under the heads "Income from house property", "Capital gains" and "Income from other sources". Explanation .- In this clause, the expression "gross total income" shall have the meaning assigned to it in section 80B of the Income-tax Act; (7) "jewellery" includes- (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones, and whether or not worked or sewn into 'any w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of construction, as so increased, shall be taken to be the value of the property under this rule: Provided also that the provisions of the second proviso shall not apply for determining the value of one house belonging to the assessee, where such house is acquired or the construction whereof is completed after the 31st day of March, 1974, and the house is exclusively used by the assessee for his own residential purposes throughout the period of twelve months immediately preceding the valuation date and the cost of acquisition or, as the case may be, the cost of construction, as, increased, in either case, by the cost of any improvement to the house, does not exceed,- (a) if the house is situate at Bombay, Calcutta, Delhi or Madras, fifty lakh rupees; . (b) if the house is situate at any other place, twenty-five lakh rupees: Provided also that where more than one house belonging to the assessee is exclusively used by him for residential purposes, the provisions of the third proviso shall apply only in respect of one of such houses which the assessee may, at his option, specify in this behalf. 4. Net maintainable rent how to be computed. For the purposes of rule 3, "net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has accepted any amount as deposit (not being advance payment towards rent for a period of three months or less), by the amount calculated at the rate of 15 per cent. per annum on the amount of deposit outstanding from month to month, for the number of months (excluding part of a month) during which such deposit was held by the owner in the previous year, and if the owner is liable to pay interest on such deposit, the increase to be made under this clause shall be limited to the sum by which the amount calculated as aforesaid exceeds the interest actually paid; (iv) where the owner has received any amount by way of premium or otherwise as consideration for leasing of the property or any modification of the terms of the lease, by the amount obtained by dividing the premium or other amount by the number of years of the period of the lease; (v) where the owner derives any benefit or perquisite, whether convertible into money or not, as consideration for leasing of the property or any modification of the terms of the lease, by the value of such benefit or perquisite; (2) "rent received or receivable" shall include all payments for the use of the property, by whatever name calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch minimum area shall be deemed to be the specified area; (c) "unbuilt area", in relation to the aggregate area of the plot of land on which the property is constructed, means that part of such aggregate area on which no building has been erected, 7. Adjustment for unearned increase in the value of the land. Where the property is constructed on land obtained on lease from the Government, a local authority or any authority referred to in clause (20A) of section 10 of the Income-tax Act, and the Government, on any such authority is, under the terms of the lease, entitled to claim and recover a specified part of the unearned increase in the value of the, land at the time of the transfer of the property, the value of such property as determined under rule 3 shall be reduced by the amount se liable to be claimed and recovered or by an amount equal to fifty per cent. of the value of the property as so determined, whichever is less, as if the property had been transferred on the valuation date. Explanation. For the purpose of this rule, "unearned increase" means the difference between the value of such land on the valuation date as determined by the Government or such authority fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the adjusted paid-up value shall be reduced- (a) in the case of a non-cumulative preference share, as indicated in the Table below :- TABLE Number of accounting years ending on the valuation date or, in a case where the accounting year does not end on the valuation date, the number of accounting years ending on a date immediately preceding the valuation date, for which no dividend has been paid Rate of reduction (1) (2) Three years 10 per cent. of the paid-up value or the adjusted paid- up-value, as the case may be ; Four Years 20 -do- Five years 30 -do- Six years and above 40 -do- (b) in the case of a cumulative preference share, by one half of the rates specified in the aforesaid Table. Explanation .- For the purposes of this rule, "adjusted paid-up value", in relation to a preference share, means an amount which' bears to the paid-up value of the preference share the same proportion as the stipulated rate of dividend [being the rate of dividend on the preference share specified in the terms of issue of such share, and in a case where such dividend is required to be increased under the provisions of section 3 of the Preference Shares (Regulation of Divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exed thereto and forming part of the accounts) as drawn up on the valuation date and, where there is no such balance-sheet, the balance-sheet drawn up on a date immediately preceding the valuation date, and, in the absence of both, the balance-sheet drawn up on a date immediately after the valuation date. 12. Unquoted equity shares in investment companies. (1) Subject to rule 13, the value of an unquoted equity share in an investment company shall be determined in the manner specified in sub-rule (2). (2) The value of all the liabilities as shown in the balance-sheet of such company shall be deducted from the value of all its assets shown in that balance-sheet; the net amount so arrived at shall be divided by the total paid-up equity share capital of the company as shown in the balance-sheet, and the result multiplied by the paid-up value of each equity share shall be the value of the unquoted equity share in that investment company for the purposes of this Act. (3) For the purposes of sub-rule (2), the value of an asset disclosed in the balance-sheet of the company shall be taken to be its value determined in accordance with the rules as applicable to that particular asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but are not accounted for in the profit and loss account; (d) any development rebate or investment allowance debited in the books of account shall be added back to the book profits; (e) the tax liability of the company on the book profits, arrived at after the adjustments at items (a), (b), (c) and (d), shall be deducted from such book profits; (f) amounts required for paying dividends on preference shares or shares with prior rights shall be deducted from such book profits; (g) the aggregate of the book profits for the five accounting years so arrived at, divided by 5, shall be the maintainable profits of the company. - Explanation .- For the purposes of this rule, "interlocked companies" means any two investment companies each of which holds shares in the other company. PART D Assets of business 14. Global valuation of assets of business. (1) Where the assessee is carrying on a business for which accounts are maintained by him regularly, the net value of the assets of the business as a whole, having regard to the balance sheet of such business on the valuation date after adjustments specified in sub-rule (2) shall be taken as the value of such assets for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extent to which it has been specifically utilised for acquiring an asset in respect of which wealth-tax is not payable under this Act: Provided that where it is not possible to calculate the amount of debt so utilised, it shall be taken as the amount which bears the same proportion to the total of the debts owed by the assessee as the value of that asset bears to the total value of the assets of the business. Explanation .- Provision for any purpose other than taxation shall be treated as a reserve. PART E Interest in firm or association of persons 15. Valuation of interest in firm or association of persons. The value of the interest of a person in a firm of which he is a partner or in an association of persons of which he is a member shall be determined in the manner provided in rule 16. 16. Computation of net wealth of the firm or association and its allocation amongst the partners or members. The net wealth of the firm or association of persons on the valuation date shall first be determined as if it were the assessee and, thereafter,- (i) that portion of the net wealth of the firm or association as is equal to the amount of its capital shall be allocated among ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t accrued to the assessee from the life interest by the fraction (1/p+d) minus 1, where 'P' represents the annual premium for a whole life insurance without profits on the life of the life tenant for unit sum assured as specified in the Appendix to these rules, and 'd' is equal to (i/1+1), 'i' being the rate of interest. Explanation .- In this rule,- (a) "life tenant" means a person for the duration of whose life the life interest is to subsist; (b) "average annual income" means the average of the gross income derived by the assessee from the life interest during each year of the period ending on the valuation date, reduced by the average of the expenses incurred on the collection of such income in each of those years: Provided that the amount of the reduction for such expenses shall, in no case, exceed five per cent. of the average of the annual gross income: Provided further that in case the income so derived is for a period exceeding three years, only that income derived during the three years ending on the valuation date shall be taken into account; (c) the rate of interest shall be 6 ½per cent. per annum. (2) Notwithstanding anything contai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be estimated to be the price which, in the opinion of the Assessing Officer, it would fetch if sold in the open market on the valuation date. (2) Notwithstanding anything contained in sub-rule (1), where the valuation of any asset referred to in that sub-rule is referred by the Assessing Officer to the Valuation Officer under section 16A, the value of such asset shall be estimated to be the price which, in the opinion of the Valuation Officer, it would fetch if sold in the open market on the valuation date. (3) Where the value of any asset cannot be estimated under this rule because it is not saleable in the open market, the value shall be determined in accordance with such guidelines or principles as may be specified by the Board from time to time by general or special order. 21. Restrictive covenants to be ignored in determining market value. For the removal of doubts, it is hereby declared that the price or other consideration for which any property may be acquired by or transferred to any person under the terms of a deed of trust or through or under any restrictive covenant in any instrument of transfer shall be ignored for the purposes of determining under any provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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