Law:

Section:

Section 27, read with section 7, of the Wealth-tax Act, 1957 - Reference - Question of law - Whether question as to whether enforcement of Land Ceiling Act would automatically have effect of diminishing value of vacant land held by an assessee in excess of limit laid down by Land Ceiling Act, was a question of law - Held, yes Facts The assessee had vacant open land to the extent of 16,000 sq. meters in excess of 2,000 sq. meters, which she was permitted to keep under the provisions of the Urban Land (Ceiling and Regulation) Act, 1976. In respect of the assessment year 1977-78, the assessee filed her return of wealth declaring the value of said land at Rs. 1,16,000. For the assessment year 1975-76, the WTO had valued the land at Rs. 2,98,000. The assessee's case was that the said Act came into force with effect from 17-2-1976 and as a result of the enforcement of the said Act, there was no market value of the land in excess of ceiling limit. In respect of the excess 16,000 sq. meters land, she submitted that the value should have been computed at the rate of Rs. 5 per sq. meter as provided in section 11(b)( ii) of the aforesaid Act, although in respect of 2,000 sq. meters land, the value was computed at the rate of Rs. 18 per sq. meter. The WTO rejected the assessee's contention and valued the said land as was done in the assessment year 1975-76. On appeal, the Tribunal accepted the assessee's contention, holding that in respect of the excess land, the assessee was only entitled to receive compensation at the rate of Rs. 5 per sq. meter in accordance with the provisions of the Land Ceiling Act and as such the value of such excess land could not be assessed at more than the amount of compensation which was receivable in respect thereof by the assessee. The Tribunal also rejected the revenue's reference application under section 27(1). On application under section 27(3), the revenue contended that a question of law did arise as the provisions of section 11(b)( ii) would be applicable only when the vacant land in question was deemed to have been acquired by the State Government under section 10(3) of the Land Ceiling Act but as no notification had been published…

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