S.K. Mal Lodha, J. - (1.)AT the instance of the assessee, the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short " the Tribunal "), has referred the following questions for the opinion of this court, which are said to arise out of its order dated August 31, 1976, which was subsequently modified on April 19, 1978, passed in Wealth-tax Appeals Nos. 94 and 95 of 1974-75:
" 1. Whether, on the facts and circumstances of the case, the Tribunal was justified in treating the appellant on the valuation date as owner of Jhandewalon property and including the value of the same in the total wealth ?

(2.)WHETHER in view of the fact that property was constructed in the immediate past, the cost of construction is accepted by the Department and sale value of the land was before it, the Tribunal was justified in estimating the value of the property by applying a certain year's purchase price when its value as on the valuation date can be estimated exactly on land and building method ?
Whether the Tribunal in view of the fact that the property did not stand registered in the name of the appellant on the valuation date, there was agreement in the form of a partnership deed to divide the profits and when the right to sell of the appellant was registered was justified in estimating the value of the property at Jhandewalan by applying a multiple of 14 times?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in including the fall value of the property at Jhandewalan in the total wealth of the appellant ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the valuer's report filed by the appellant in respect of her property at Jhandewalan and valuing this property by applying a certain years' purchase ? "

2. In this reference, the assessment years involved are 1967-68 and 1968-69. We are concerned with the valuation of the property situate at Jhandewalan, Delhi. The assessee, in support of the market value of this property as well as the properties situate in Greater Kailash, Delhi, submitted the report of a valuer, namely, M/s. Pradhan Ghosh and Associates, to the Wealth-tax Officer. The Wealth-tax Officer did not accept the market value as stated by the valuer and disclosed by the assessee, in regard to the two years in question. The Wealth-tax Officer determined the net annual letting value of the property at Rs. 39,838 and by capitalising the annual rent by certain number of years purchase, i.e., by applying the multiple of 16.66 times, he valued this property at Rs. 6,63,717. An appeal was taken before the Appellate Assistant Commissioner. He, vide his order dated June 26, 1974, determined the value of the property at Jhandewalan at Rs. 5,57,746 against the value determined by the Wealth-tax Officer at Rs. 6,63,717. A further appeal was preferred. The Tribunal agreed with the finding of the Appellate Assistant Commissioner in regard to Jhandewalan property. The Tribunal, while holding that the valuation of Jhandewalan property was rightly determined by applying the multiple of 14 times, observed as under :

" We have heard the parties and perused the material available on record. It is common ground that the property in question is commer- cial property and its net annual letting value was the same as was determined by the Wealth-tax Officer. The Wealth-tax Officer has determined the net annual letting value of this property at Rs. 39,839. In view of the ratio of decisions referred to above, for such a building the only proper and correct method for finding out market value of the property would be to apply multiple of certain years purchase to the net annual letting value of the property.

In respect of immovable property, there could not be any fixed market such as market for share, or for other commodities like sugar, cloth, etc. For determining market value of immovable property, there must be certain amount of guess but the guess must be an intelligent one based on certain objective factors which have a rational nexus with the valuation. In order to find out market value of the immovable property, the location of the immovable property, viz., whether it is situated in a high class locality or ordinary residential area, has easy access to business and shopping centres has a good road from, etc., are also factors which affect the market value of the property considerably,"

3. It further observed :

"The Wealth-tax Officer after considering the entire material on record valued the property by applying the multiple of 16.66 times. The learned Appellate Assistant Commissioner applied the multiple of 14 times. Before us, on behalf of the assessee, no convincing material was brought on record to show that the multiple of 14 times applied by the Appellate Assistant Commissioner was unfair and excessive. Similarly, on behalf of the Revenue, no cogent material was brought on record to establish that the multiple of 16.66 times was fair and reasonable. The learned Appellate Assistant Commissioner considered all the facts and circumstances of the case. In our opinion, the discretion exercised by the learned Appellate Assistant Commissioner is not perverse or not against the facts and the material on record. Thus, in our opinion, the finding of the learned Appellate Assistant Commissioner on this point is quite correct and no interference is called for."

4. While dealing with the contention that the Jhandewalan property did not absolutely belong to the assessee, the Tribunal held that it did belong to the assessee. It, therefore, agreed with the findings of the Appellate Assistant Commissioner. The application under Section 27(1) of the Wealth-tax Act, 1957 ("the Act" hereinafter), was moved and the questions stated hereinabove have been referred,

5. Question No. 1: The Tribunal has found that on the valuation date the assessee was the owner of Jhandewalan property and its entire value is to be included in the assessee's total wealth. On the basis of the document dated November 5, 1964, it was submitted by the learned counsel for the assessee that Nitin Mohan Nagpal became entitled to 50% of the net profits or receipts from the immovable property on account of rent after payment of tax and other expenses. It may be stated that D.B.I.T, Reference No. 37 of 1975 was made at the instance of the assessee in respect of the assessment year 1965-66. The document relied on was an agreement dated November 5, 1964, according to which Nitin Mohan and Savita Mohan Nagpal were entitled to share the net profits half and half out of rents of the building after payment of taxes and defraying of expenses, on the basis that it was held that no attempt was made by Smt. Savita Mohan to part with the ownership of the half of the property in question to her son. The Tribunal, therefore, held that Smt. Savita Mohan continued to remain the sole owner of the entire property. After construing the agreement dated November 5, 1964, a Division Bench in Smt. Savita Mohan Nagpal v. CIT (D.B.I.T. Reference No. 37 of 1975, decided on April 4, 1984--[1985] 154 ITR 449 (Raj)) held that Smt. Savitha Mohan Nagpal remained the absolute owner of the immovable property and she had no intention of parting with a share of the title or ownership of the property, but by virtue of the document dated November 5, 1964, an overriding charge was created in favour of her son, Nitin Mohan, on account of which he became entitled to 50% of the net profits or receipts from the immovable property on account of rent after payment of taxes and other expenses. It may be stated that the learned counsel for the assessee as well as the Revenue stated before us that in view of the pronouncement of this court in Smt. Savita, Mohan Nagpal's case [1985] 154 ITR 449, the finding of the Tribunal that on the valuation date, the assessee was the owner of the Jhandewalan property, is not open to challenge and question No. 1 referred by the Tribunal should be answered in the affirmative. We have considered the (document) dated November 5, 1964, and also the reasons for holding that the assessee was the owner of the Jhandewalan property despite the agreement dated November 5, 1964. We hold that the conclusion arrived at by the Tribunal treating the assessee as the owner of the Jhandewalan property is correct.

Question No. 2: For this question, we shall have to notice the relevant provisions of the Act.

(3.)"Asset" has been defined in Section 2(e) of the Act, as under :
"(e) 'assets' includes property of every description, movable or immovable, but does not include,--

(1) in relation to the assessment year commencing on the 1st day of April, 1969, or any earlier assessment year-

(i) agricultural land and growing crops, grass or standing trees on such land;

(ii) any building owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land :

Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an out-house;

(iii) animals;

(iv) a right to any annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant;

(v) any interest in property where the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee ;

(2) In relation to the assessment year commencing on the 1st day of April, 1970, or any subsequent assessment year-

(i) animals;

(ii) a right to any annuity (not being an annuity purchased by the assessee or purchased by any other person in pursuance of a contract with the assessee) in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant;

(iii) any interest in property where the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee :

Provided that, in relation to the State of Jammu and Kashmir, this sub-clause shall have effect subject to the modification that for the assets specified in item (i) of this sub-clause, the assets specified in items (i) to (iii) of Sub-clause (1) shall be substituted and the other provisions of this Act shall be construed accordingly; "

"Net wealth" has been defined in Section 2(m) of the Act, which is as under :

"(m) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than-

(i) debts which under Section 6 are not to be taken into account;

(ii) debts which are secured on, or which have been incurred in relation to, any property in respect of which wealth-tax is not chargeable under this Act; and

(iii) the amount of the tax, penalty or interest payable in consequence of any order passed under or in pursuance of this Act or any law relating to taxation of income or profits, or the Estate Duty Act, 1953 (34 of 1953), the Expenditure-tax Act, 1957 (29 of 1957), or the Gift-tax Act, 1958 (18 of 1958),--

(a) which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him; or

(b) which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the valuation date. "

In accordance with Section 2(9) of the Act, the valuation date in relation to any year for which the assessment is to be made under the Act, means the last date of the previous year as defined in Section 3 of the Income-tax Act, 1961. There are provisos to this section with which we are not concerned. Section 7 of the Act provides as to how the valuation of assets is to be determined.