COMMISSIONER OF WEALTH TAX Vs. BALLABH KUMARI

JUDGEMENT

(1.) THE application for making a reference under Section 27(3) of the Wealth-tax Act, 1957, has been made by the Commissioner of Wealth-tax, Rajasthan, Jaipur, praying that the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, be directed to draw up a statement of the case and, refer the following questions arising out of its order dated July 17, 1980, to this court for its opinion :

(2.) IN respect of the assessment year 1977-78, the assessee, Smt. Ballabh Kumari of Bagsuri, Ajmer, filed the return of wealth-tax declaring the value of land held by her at Ajmer at Rs. 1,16,000. IN respect of the assessment year 1975-76, the Wealth-tax Officer had valued the land at Rs. 2,98,000. The assessee's case was that the Urban Land (Ceiling and Regulation) Act, 1976, came into force with effect from February 17, 1976, and as a result of the enforcement of the said Act, there was no market value for the land in question. It was submitted on behalf of the assessee that she had vacant land to the extent of 16,000 sq. metres in excess of 2,000 sq. metres land which she was permitted to keep under the provisions of the Land Ceiling Act. IN respect of the excess 16,000 sq. metres land, the assessee submitted that the value should be computed at the rate of Rs. 5 per sq. metre, as provided in Section 11(b)(ii) of the Urban Land Ceiling Act, although, in respect of the 2,000 sq. metres land, the value was computed at the rate of Rs. 18 per sq. metre. Thus, the total value of the vacant land held by the assessee was said to be Rs. 1,16,000. The Wealth-tax Officer did not accept the contention advanced by the assessee and valued the land at Rs. 2,98,000 as was done in the assessment year 1975-76. However, on appeal, the INcome-tax Appellate Tribunal, Bombay Bench (B), accepted the contention of the assessee and held that in view of the fact that the Urban Land Ceiling Act came into force with effect from March 9, 1976, the value of open land exceeding 2,000 sq. metres, should be computed at the rate of Rs. 5 per sq. metre, as provided under Section 11 (b)(ii) of the Land Ceiling Act. The Tribunal observed that in respect of the excess land, the assessee was only entitled to receive compensation at the rate of Rs. 5 per sq. metre in accordance with the provisions of the Land Ceiling Act and, as such, the value of such excess land could not be assessed at more than the amount of compensation which was receivable in respect thereof by the assessee.