Law:

Section:

Section 7 of the Wealth-tax Act, 1957, read with rule 1BB of the Wealth-tax Rules, 1957 - Valuation of assets - Immovable property - Assessment years 1973-74 to 1975-76 - Tribunal allowed deduction of 1/6th for repairs and 6 per cent for collection charges for working out net annual letting value of property owned by assessee - From 1-4-1979, rule 1BB was retrospectively inserted in Wealth-tax Rules, 1957 whereby deduction of 1/6th towards repairs and 6 per cent towards collection charges has been allowed - Whether since Tribunal had decided appeal on 17-1-1981, order of Tribunal was in conformity with rule 1BB and, as such, was to be upheld - Held, yes Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - Immovable property - Assessment years 1973-74 to 1975-76 - Whether reversionary value of land cannot be taken into consideration where value of property is determined by capitalizing net annual letting value - Held, yes FACTS The assessee was a co-owner in the five properties. The assessee valued the said properties on the basis of the valuation report of the approved valuer for the assessment years 1973-74 to 1975-76. The WTO referred the valuation of the said properties for the assessment years 1974-75 and 1975-76 to the Departmental Valuation Cell under section 16A and on the basis of its reports, determined the value of the said properties for the relevant assessment years. The value so determined by him was higher than the value shown by the assessee. The WTO assessed the assessee's share in the said properties to wealth-tax accordingly. On appeal, the AAC held that the deduction for repairs and collection charges should be allowed at 1/6th and 6 per cent respectively as against 1/12th and 4 per cent allowed by the Valuation Officer for working out the net annual value. The AAC further deleted the addition of reversionary value of the land. On revenue's appeal, the Tribunal upheld the order of the AAC. On reference : HELD From the reading of order of the Tribunal, it appeared that even the Central Board of Direct Taxes had issued a Circular for granting deduction of 1/12th towards the repairs and 4 per cent towards collection charges while…

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