Law:

Section:

Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - Immovable property - Assessment years 1961-62, 1964-65 and 1965-66 - Whether where house in question was occupied by assessee for residential purposes, provisions of State Rent Control Act could not be a safe guide for purpose of determination of fair market value of house in question - Held, yes FACTS The house in question was used by the assessee for his residential purpose. The value declared by the assessee was not accepted by the WTO. On appeal, the AAC enhanced the value to Rs 4 lakh. On further appeal, the Tribunal considered it proper to refer the question of the disputed value to the arbitration of two valuers, as provided by section 24(6)(a). The two valuers gave a unanimous valuation report fixing the valuation of the said property at Rs. 1.40 lakh on the relevant valuation date. On reference, the assessee submitted that the said residential house was governed by the Rent Control Act, and, therefore, the value of the property should have been determined on the basis of the Act. HELD According to the definition, in Rent Control Act, the annual reasonable rent of the house in question would be the municipal assessment as on 1-4-1942, plus 25 per cent thereon. Since the house had not been tenanted and was being used by the assessee himself who was its owner, for his residential purposes, the valuation given in the municipal assessment could not be a safe guide for the purposes of determination of the fair market value. Precisely for that reason, the Tribunal had not applied the provisions of the Rent Control Act for determining the valuation of the house in question. The Tribunal appointed two valuers for the purpose of finding the correct valuation of the house. The valuers agreed that the property could fetch more than Rs. 1,000 per month as rent. In this view of the matter, it appeared that the standard of municipal annual letting value would be wholly illusory particularly when the house had not let out. Note : The case was decided in favour of revenue. JUDGMENT Satish Chandra, CJ.-At the instance of the assessee, the Tribunal has referred for our opinion the following questions :…

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