Commissioner of Wealth-tax vs Raj Kumari Bhuvneshwari

The Income Tax Appellate Tribunal has referred the following two questions of law arising out of its order dated January 11, 1984, in respect of the assessment year 1974-75 u/s 27(1) of the Wealth-tax Act, 1957 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the provisions of the Rajasthan Urban Property (Restriction on Transfer) Act, 1973, are applicable for determining the market value of the plots for purposes of wealth-tax on the relevant valuation date ?

Whether, on the facts and in the circumstances of the case, the Tribunal''s finding that the market value of the plots on the relevant valuation date could not be more than Rs. 3,00,000 in view of the provisions of the Rajasthan Urban Property (Restriction on Transfer) Act, 1973, is perverse and contrary to the material on record ?"

The point in controversy is concluded by the decision of this court in the case of Commissioner of Wealth-tax Vs. Raj Kumari Bhubaneshwari Kumari, in which following observations were made (at page 715) :

"In view of the above observations, we are of the opinion that because of the Act, it was only the restriction which was placed on the right of the owner to transfer the property, therefore, the valuation is affected, but is not restricted to Rs. 3 lakhs alone. In the case of Commissioner of Wealth Tax, Patna Vs. Raghubar Narain Singh, the apex court held that if an asset is subject to certain hazards including the liability of certain debt to be deducted from the asset, then that factor which has the effect of diminishing the market value of the asset is a relevant factor to be taken into consideration while estimating the value of the asset in the open market. In these circumstances, we are of the view that the Tribunal was not justified in coming to the conclusion that because of the provisions of the Act, the value of the property has to be restricted to Rs. 3 lakhs alone. The matter is sent back to the Tribunal to hear other objections of the assessee with regard to valuation of the property and decide the valuation in accordance with the observations made above."

In view of the above decision, the reference is answered in favour of the Revenue and against the assessee and the matter is sent back to the Income Tax Appellate Tribunal to hear the other objections of the assessee with regard to the valuation of the property.

No orders as to costs.