The Commissioner of Wealth Tax vs Rajendra Prasad Industries Pvt. Ltd.

P.D. Dinakaran, J.—Against the order of the Appellate Tribunal in WTA.Nos.149 to 154/Mds/2003, dated 3.3.2005, the Revenue has

preferred the appeal and raised the following common substantial question of law:

Whether in the facts and circumstances of the case, the Tribunal was right in holding that the immovable property subject to Urban Land Ceiling

laws should only be valued as per the compensation payable under the Urban Land Ceiling Act and not as per the market value?

The Revenue is the appellant. The assessment years involved in the appeals are 1995-96 to 2000-01. The assessing officer fixed the value of

the property belonging to the assessee based on the guideline value certified by the Sub Registrar. The Commissioner of Wealth-tax (Appeals)

directed the assessing officer to accept the wealth returned by the assessee as the land in excess of ceiling limits should be valued as per the

compensation payable under the Urban Land (Ceiling & Regulation) Act. The Appellate Tribunal decided the matter in favour of the assessee. The

said order of the Appellate Tribunal is put in issue in the present appeals.

It is fairly submitted by the learned counsel appearing for the appellant that the issue raised in the question is covered against the Revenue by the

decision of Gujarat High Court in Commissioner of Income Tax Vs. G.S. Krishnavati Vahuji Maharaj Kalyanraiji Temple, . In the said decision,

the Gujarat High Court held as under:-

Whenever there is any restriction on the transfer of any land, it is a matter of common knowledge that the value of the property or land, as the

case may be, would be normally reduced. In the instant case, it was not open to the assessee to sell the land and, therefore, the value of the land in

question cannot be more than what the Government was to offer to the assessee under the provisions of the Ceiling Act.

In view of the above settled law, we are of the considered view that the Appellate Tribunal was right in holding that the immovable property

subject to Urban Land Ceiling Laws should only be valued as per the compensation payable under the Urban Land Ceiling Act. Accordingly, the

question of law referred to above is answered in the affirmative, against the Revenue and in favour of the assessee. The appeals are dismissed. No

costs.