P J GEORGE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) REFERENCES are at the instance of the assessee from two orders passed by the Income-tax Appellate Tribunal, Cochin Bench, in W. T. A. Nos. 24 and 25 of 1979 and 93 and 94 of 1979. The relevant assessment years are 1974-75 to 1977-78. The following question is referred for the opinion of this court :

(2.) THE relevant facts are as follows. THE assessee constructed a godown on a leasehold land of 24 cents in Palluruthy, Cochin. THE land belongs to John and Sons Pvt. Ltd. THE managing director of the company was the father of the assessee and the other two shareholders were the assessee's close relatives. THE lease was originally granted in the year 1968 for a period of 10 years which was thereafter extended up to 1988. THE rental payment under the lease was Rs. 3,840 per annum as per the agreement. THE lessee was free to construct a building on the land and on termination of the lease, the superstructure was to remain on the land and the assessee was entitled to receive the market value of the superstructure as on the date of termination of the lease. THE assessee constructed a godown on the land at a cost of Rs. 96,500 in the year 1969. THE godown was let out to Packwell (Kerala) Industries for a period of 10 years. THE rent was originally agreed at Rs. 2,900 per month for the first three years and thereafter at Rs. 3,450 per month. This arrangement was subsequently revised and for 1975-76 the rent was fixed at Rs. 3,150 and for 1976-77 at Rs. 3,250 per month.

(3.) ON going through the order passed by the first appellate authority as well as the Tribunal, we do not find that any specific contention had been taken by the assessee on the ground that valuation has to be made by applying Rule 8(c) read with Rule 20 of Schedule III. In any view of the matter we are inclined to consider the above contention raised by the assessee on the merits. As mentioned earlier, Section 7(1) of the Wealth-tax Act, 1957, as it stood in the relevant period provided that the value of the asset other than cash shall be estimated on the basis of the open market value. Rule 1BB referred only to valuation of residential buildings.