Law:

Section:

Section 7 of the Wealth-tax Act, 1957, read with section 11 of the Urban Land (Ceiling and Regulation) Act, 1976 - Valuation of assets - Immovable property (Land) - Assessment years 1977-1978 to 1986-1987 - Whether where vacant land in excess of ceiling limit under Ceiling Act, which was going to be taken over by Government, would not fetch more than Rs. 2 lakhs, Assessing Officer was not justified in working out value of vacant land by determining what it would have fetched, if it were sold in open market - Held, yes [Paras 30 and 31] [In favour of assessee] FACTS â–  The assessee was in possession of a palace which comprised of residential units, non-residential units and land appurtenant thereto, roads and masonary structures along the contour and the vacant land. â–  The Assessing Officer, for assessment years 1977-78 to 1986-87, worked out the value of the vacant land by determining what it would have fetched, if it were sold in the open market. â–  On appeal, the Commissioner (Appeals) held that the vacant land should be valued at Rs 2 lakhs for some assessment years as that amount was the maximum compensation that could be possibly received by assessee under the Ceiling Act. â–  On cross appeal, the Tribunal passed the order directing the vacant land be valued at Rs. 2 lakhs for each assessment years. â–  On appeal, the High Court upheld the order of the Assessing Officer. â–  On appeal: HELD â–  The combined effect of the provisions of the Ceiling Act, in the context of instant appeals, is that the vacant land in excess of ceiling limit was not acquired by the State Government as notification under section 10(1) of the Ceiling Act had not been issued. However, the process had started as the assessee had filed statement in the prescribed form as per the provisions of section 6(1) of the Ceiling Act and the Competent Authority had also prepared a draft statement under section 8 which was duly served upon the assessee. Fact remains that so long as the Act was operative, by virtue of section 3 the assessee was not entitled to hold any vacant land in excess of the ceiling limit. Order was also passed to the effect…