COMMISSIONER OF WEALTH-TAX Vs. GAYATRI DEVI

JUDGEMENT

(1.) THIS is a reference made at the instance of the Revenue under Section 27 (3) of the Wealth-tax Act, 1957, "for answering the following question of law : "whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the order of the Commissioner of Wealth-tax (Appeals) holding that the value of the land should not be added while valuing the property on the rent capitalisation method ?"

(2.) THE question arises out of the assessment year 1986-87. In short and in substance, the question arose before the assessing authority (wealth-tax) as to what should be the mode of valuation for determining the immovable properties of the assessee. This question arose while valuing the property which was in possession of the tenants of the assessee. The Valuation Officer, while making the valuation, applied the method of rent capitalisation and further proceeded to add the value of the land on which the property was constructed. It is against this method of valuation, or one may say the manner of doing the valuation, the assessee carried the matter to the Commissioner of Income-tax (Appeals) and then to the Tribunal. In the opinion of the Tribunal, while placing reliance on the decision reported in CIT v. Smt. Ashima Sinha [1979] 116 ITR 26 (Cal) and CWT v. Ram Saran Kajriwal [1987] 168 ITR 485 (All), the valuation of land cannot be taken into account when the method of rent capitalisation is adopted. If is against this view of the Tribunal, the Revenue has felt aggrieved and prayed the reference on the question referred to this court for answer.

(3.) HEARD Shri R. L. fain, learned counsel for the appellant, and Shri S. R. Kochatta, learned counsel for the respondent.