Simpson and Co. Ltd. vs Commissioner of Wealth-tax

N.V. Balasueramanian, J.—This is a petition by the assessee to direct the Income Tax Appellate Tribunal to state a case and refer the

following questions of law u/s 27(3) of the Wealth-tax Act, 1957, in respect of valuation of the land for the assessment year 1988-89 :

(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the valuation of the land of the assessee at

Sembium and Madhavaram ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the land at Sembium and Madhavaram which

are the subject-matter of acquisition under the Tamil Nadu Urban Land Ceiling Act should not be valued as per the compensation payable under

the Act, as held by the Madras High Court in the case reported in Commissioner of Wealth-tax, Tamil Nadu-II, Madras Vs. K.S. Ranganatha

Mudaliar and Others, ?

The assessee admittedly is the owner of the land situated at Madha-varam and Sembium. The Assessing Officer estimated the value of the

property at Madhavaram at Rs. 2,50,94,056 and that at Sembium at Rs. 68,20,832. The Appellate Assistant Commissioner gave a reduction of

10 per cent. when the valuation of the two properties was challenged before him. The Appellate Tribunal, on appeal, by the assessee, rejected the

contention of the assessee that the value of the properties should be made on the principles adopted under the relevant ceiling law. The Tribunal

found that the property in dispute was exempted from the provisions of the Urban Land Ceiling Act by virtue of the order of the Government of

Tamil Nadu and since the properties were exempted from the provisions of the Urban Land Ceiling Act, the Tribunal held that the property need

not be valued on the basis provided under the Urban Land Ceiling Act. The Tribunal also found that a discount of 10 per cent. was given on the

market value of the property and that would be sufficient to take care of the restriction imposed by the Government on alienation of property by

the assessee. The Tribunal ultimately held that the value adopted by the Commissioner of Wealth-tax was justified and dismissed the appeal. The

assessee which was unsuccessful before the Tribunal in getting a reference, has filed the present petition for direction.

We are of the opinion that the Tribunal has come to the correct conclusion in holding that the standard adopted to value property under the

provisions of the Urban Land Ceiling Act cannot be adopted to determine the market value. There is no dispute that the properties were exempted

from the operation of the provisions of the Urban Land Ceiling Act by a Government order and the valuation of a property exempted from the

purview of the ceiling law cannot be made on the same basis as the valuation adopted to value the land within the ceiling level. The Tribunal took

note of the restriction imposed in the Government order on the alienation of the lands and upheld the deduction of 10 per cent. in the total value of

the property determined by the wealth-tax authority. That apart, the question of valuation is a pure question of fact and there is no error in the

principles of valuation adopted by the Tribunal in upholding the valuation of the land. We are, therefore, of the opinion that the question sought to

be raised is a pure question of fact and, accordingly, the tax case petition is liable to be dismissed.

In the result, the tax case petition is dismissed. The Revenue is entitled to costs of a sum of Rs. 500.