Law:

Section:

Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - Immovable property - Assessment years 1957-58 to 1962-63 - WTO valued land with godowns which were in possession of tenants against whom eviction proceedings were pending by land and building valuation method while assessee valued that property on basis of annual rental income - Whether since building and structures mere very old and assessee had been litigating for several years to get possession, to take value on basis of building and land separately or even of land separately would not be appropriate method because land could not have been sold without demolishing structure and structures could not have been demolished without ejecting tenants which in view of Rent Restriction Act and instant position of litigation was no easy matter - Held, yes - Whether therefore, rental method, i.e., method based on expected return by letting out was more reliable method of valuing it on basis of land - Held, yes FACTS The assessee purchased certain house property (godowns) consisting of very old godowns which was let out to three different tenants. The assessee valued that property for all the assessment years at Rs. 2,07,180 at the rate of 20 times of annual rental income. The WTO did not accept the valuation shown by the assessee. Applying the land and building method for valuation. The total value of the property was computed by the WTO at Rs. 7,20,000 for all these years. On appeal, the AAC was of the view that the property was situated in the heart of the commercial center of the City. According to him there was a great demand for land and building in that area amongst the business community. However, considering the fact that the godowns were in possession of the tenants who could not be evicted easily and there could not be many willing buyers for the same, the AAC took the value of the property at Rs. 4 lakhs in the assessment year 1957-58 and increased the same progressively by Rs. 25,000.. The assessee as well as revenue preferred appeals to the Tribunal. The Tribunal, observed in its order, that as the assessee was yet unable to evict the old tenants and the litigations were still pending, this…

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