Decided on October 06,1993



T.V.K. Natarajachandran, Accountant Member - (1.) THESE appeals by the assessee are consolidated and disposed of by a common order for the sake of convenience as they involve common issues. The assessee is a resident company and the assessment years involved are 1986-87 and 1987-88 for which the valuation dates are 30th June, 1985 and 30th June, 1986 respectively. THESE appeals arise out of the consolidated older of the Commissioner of Wealth-tax (Appeals) dated 31-1-1992 wherein he has sustained the valuation of the property syled as "DHANUR BUILDING' for the assessment year 1986-87 at cost thereof subject to direction to make addition of the actual repair expenses incurred thereon in that year towards repairs and renewal. As regards the assessment year 1987-88, the CWT(A) accepted the plea of the assessee that 700 sq. ft. out of 3000 sq. ft. of the building was occupied by the assessee for its office use. Therefore the cost of the building and the cost of renovation and renewals incurred in that year should be excluded proportionately i.e., 7/30th of the portion of the building should be excluded from valuaton as exempted and 23/30th portion of the building which is tenanted should be" valued on rent capitalisation method. Thus he has given a partial relief for the assessment year 1987-88.
(2.) The assessee has taken several grounds to dispute the decision of the CWT(A). At the time of hearing the assessee has filed additional grounds to the effect that the CWT(A) ought to have held that the appellants were not the owners of the property as the same has not been registered in the name of the appellant and therefore value of the property was not assessable in the hands of the appellants. The case of the WTO is that the property has been purchased during the year and hence the cost of the property namely Rs. 31,78,025 was adopted as the value of the property for the assessment year 1986-87 and the same value has been repeated for assessment year 1987-88.
(3.) ON appeal the CWT(A) was inclined to agree with the view of the WTO inasmuch as the market price or the purchase price paid by the assessee is the correct market value because any purchaser of property would have taken into account all the impediments and constraints involved when the property is tenanted already and the tenants are protected by the Rent Control Act. The CWT(A) also noticed the fact that the assessee had incurred huge amounts on repairs and renewals. ON these facts and also in view of the fact that there was no active user of space for office purposes, he declined to give any relief to the assessee for the assessment year 1986-87. However the CWT(A) was inclined to give some relief in view of the fact that the assessee had occupied 700 sq. ft. out of 3000 sq. ft. out of vacant space. Therefore the CWT(A) directed that the tenanted portion of the building should be valued at 12 times the net annual rent and this should be deducted from the total cost of the property including the sum invested thereon by way of repairs and renewals. ON the balance 7/30 value should be excluded for being actually used for office purposes. Accordingly he has granted partial relief as detailed in the appellate order.;

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