MAHAVIR PRASAD JAIPURIA Vs. WELTH TAX OFFICER

JUDGEMENT

(1.) In this petition, the petitioner has questioned the valuation made by the second respondent herein purported to be in terms of Section 16A (5) of the Wealth Tax Act dated 8.7.1977 and 20.7.1978 raising whereof fair market value of the property of the petitioner. The petitioner No.1 is a Hindu Undivided Family owning several properties including one at 52, Janpath, New Delhi. The said property is a leasehold one. They filed wealth tax returns for the assessment years 1971-72, 1977-78 stating that the property is an old one which is fully tenanted. According to the petitioners the monthly rent received by them was Rs. 1201.30. Having regard to the re-entry by the Land & Development Office in relation to the said property in the year 1975, the same is being realized directly from the tenants by them. The Valuation Officer in his preliminary valuation estimate, capitalized the net income from rent at 6% and allowed a redemption on capital at 5% and determined the capitalized value of the land and building taken together at Rs.1,40,798.00 for the assessment year 1971-72 to 1972-73; at Rs.1,36,476.00 for the assessment year 1973-74; at Rs.1,30,991/- for the assessment year 1974-75; at Rs.1,28,574.00 for the assessment year 1975-76, 1976-77 and Rs.1,26,029.00 for the assessment year 1977-78.

(2.) The petitioner in this writ petition has assailed the aforementioned method of valuation. Having regard to the contentions advanced by the parties, it may not be necessary to delve deep into the matter. Wealth Tax Act was enacted by the Parliament providing for the levy of wealth tax. Section 2(m) defines the expression "Net Wealth". The valuation of the assets is to be determined in terms of Section 7. Rules have been made by the Central Board of Direct Taxes in terms of Section 46 of the Act. Rule 1BB prescribes the manner in which the market value of the property is to be determined. Rule 1BB reads thus:

(3.) We may notice that such valuation report can also be subject matter of appeal in terms of Rule 23(3)(a) of the Wealth Tax Rules. For the reasons aforementioned, the writ petition is disposed of directing the respondents to make proper valuation having regard to rule 1BB. There shall be no order as to costs.