Law:

Section:

Section 7 of the Wealth-tax Act, 1957, read with section 10 of the Urban Land [Ceiling and Regulation] Act, 1976 - Valuation of assets - Immovable property - Whether where land allotted to assessee-company was declared as surplus land under 1976 Act, it has to be valued at rate of compensation paid by Government under said Act and not as per open market rate, for purposes of wealth-tax - Held, yes [In favour of assessee] FACTS The assessee-company which was engaged in the business of manufacturing industrial gases at its factory, filed return of net wealth, wherein, value of the open land was shown at Rs. 62,538. As the Assessing Officer was of the opinion that the valuation given by the assessee was shown at the same price at which the said land was acquired pursuant to land acquisition proceedings as early as in 1960, he referred the matter to the DVO for assessing the fair market value of the said open land along with other properties of the assessee. In the meantime, the assessee got another Government Regd. Valuer's report and on that basis, it filed revised return of wealth showing value of the open land in question at Rs. 1,44,146. The Assessing Officer considered the reports of both the valuers. Contention of the assessee was that the land in question was subject-matter of Urban Land [Ceiling & Regulation] Act, 1976[1976 Act] and its value should be at the rate of compensation to be awarded to the company by the Government under the provisions of the 1976 Act and the valuation as worked out by the Govt. Regd. valuer should be believed. The said stand taken by the assessee was rejected by the Assessing Officer who relied upon the report of the Departmental Valuation Officer who had considered the impact of the 1976 Act also while arriving at the valuation of the open land in question at Rs. 51,18,400. On appeal, it was contended by the assessee that the Assessing Officer was not justified in rejecting its contention that, once the land in question comes under the 1976 Act, then, it was not marketable and its value has to be determined as per the compensation payable by the Government under the 1976 Act. Request was made by the assessee to accept the…

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