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Section 45 of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1973-74 - ITO determined market value of fully grown yielding rubber trees - Tribunal accepted market value determined by ITO, however, it made certain addition to said value on basis of estimating future yield per tree - Whether since Tribunal did not find fault with determination of market value by ITO, it misdirected itself in adding any other amount to market value - Held, yes - Whether, therefore, method of valuation of rubber trees adopted by Tribunal for purpose of computation of capital gain was incorrect - Held, yes FACTS The ITO determined the market value of fully grown yielding rubber trees as on 1-1-1954. This value was confirmed in appeal by the AAC. On further appeal by assessee, the Tribunal did not find fault with the market value determined by the ITO. However, the Tribunal added what it estimated to be the future yield per tree to what the officer had computed as the market value of each three. On reference: HELD It was accepted by all the parties that what was determined by the Officer as the market value included whatever was the cost of improvements to the trees. In the circumstances, the Tribunal was not justified in adding to the market value any other ingredients. Future yield was not an ingredient which could have been added to what was already determined as the market value. In so far as the Tribunal did not find fault with the determination of the market value, the Tribunal misdirected itself in adding any other amount to the market value. It was not that future yield would not be one of the elements which might go into the consideration of the market value. But the Tribunal accepted the market value, as found by the Officer, and, therefore, having accepted that finding, the Tribunal exceeded its jurisdiction in improving upon it by adding to it. Therefore, the method of valuation of rubber trees adopted by the Tribunal for the purpose of computation of capital gains was factually and legally not correct. Note : Decision was in favour of revenue. P.K.R. Menon for the Applicant. K.A. Nayar for the Respondent. JUDGMENT T. Kochu Thommen, J.-The…

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