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Judgment
The income tax Appellate Tribunal, Delhi has referred the following two questions of law u/s 27(1) of the Wealth-tax Act, 1957, hereinafter referred to as ''the Act'' for opinion to this Court: 1. Whether on the facts and in the circumstances of the case the income tax Appellate Tribunal was right in law for the purpose of section 7(1) of the Wealth-tax Act in determining the assessee''s interest in the partnership firm by adopting the fair market value of the assets in question, namely, the cinema building on the income mobilisation basis instead of land & building method adopted by Wealth-tax Officer?
If the answer to the above question is in the negative and against the assessee then what ought to be the correct fair market value of the assets in question?
The present Reference relates to the Assessment Years 1978-79, 1970-80, 1980-81 and 1983-84.
The respondent-assessee is a partner in M/s. G.D. & Sons, which owns a cinema building in the name of Alpana Cinema Building and Hall. The question arose regarding valuation of her interest in the firm including that of the cinema building. The Wealth-tax Officer assessed the valuation of cinema building by adopting the land and building method. In appeal, the Commissioner of income tax (Appeals) allowed the plea of the respondent-assessee that the valuation should be done on income mobilization method and not by land and building method. The Revenue''s appeal before the Tribunal has failed.
We find that this Court in CWT v. Shri Shyam Lal, [WT Reference No. 207 of 1991, dated 21-10-2005] and CWT v. Shri Shyam Lal, [WT Appeal Nos. 136 and 140 of 1999, dated 23-8-2006] has held that the valuation of this my cinema building ought to have been made on the basis of the land and building method and not on the basis of the income mobilization method.
Respectfully following the aforesaid decisions, we are of the considered opinion that the tribunal was not right in upholding the direction given by the Commissioner of income tax (Appeals) for valuing the cinema building on the basis of the income mobilization method instead of land and building method.
So far as the second question is concerned, we find that the Tribunal has not adverted the issue of fair market value of the assets in question. We, therefore, leave it open to the Tribunal to decide the same in accordance with law.
In view of the aforesaid discussion, we answer the first question of law referred to us in the negative i.e., in favour of the Revenue and against the assessee and the second question is returned unanswered. However, there shall be no order as to costs.