Law:

Section:

Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - Immovable property - Assessment year 1976-77 - Whether term 'house' would include all unbuilt vast area of land and immunity as envisaged under section 7(4) can be given to such unbuilt vast area of land - Held, yes FACTS The assessee owned half share in the house property in question comprising of gardens, lawns etc. Said property was used for residential purpose. During the course of assessment for the relevant assessment year, the assessee contended that in accordance with the provisions of section 7(4), the value of the property as had been taken for the assessment year 1971-72 should also be taken for the relevant assessment year. The WTO accepted the plea taken by the assessee and valued his share accordingly. On revision, the Commissioner held that the entire piece of the land could not be considered as forming part of the house and the "house" used in section 7(4) should be understood to mean the construction and only that area of land which could be regarded as appurtenant to the house. The Commissioner was of the opinion that such land which was in excess of the area as appurtenant land, could not be considered to comprise in the house and concessional valuation provided under section 7(4), could not be made available to the surplus land. The Commissioner, thus, directed the WTO to pass a fresh assessment accordingly. On appeal, the Tribunal did not agree with the view taken by the Commissioner and, therefore, cancelled his order. On reference : HELD Undisputably the entire area of the land and the house constructed thereon, was taken to be as one residential unit in the earlier wealth-tax assessment prior to the assessment year 1976-77. With the introduction of sub-section (4) in section 7 by the Finance Act, 1976, with effect from 1-4-1976, the position of the residential house would not change. It only provided for freezing the valuation of the residential house at the option of the assessee and nothing more. In the instant case, the assessee had opted for valuation as on 1-4-1971, i.e., the date fixed in section 7(4) which valuation was done by the Departmental Valuation Officer. It is…

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