Law:

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Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - Immovable property - Whether where there was vast difference in value of property in question arrived at on basis of rental method and land and building method AAC was justified in directing WTO to adopt average of value as per said two methods - Held, yes FACTS The assessee was owing a theatre complex. She got the said building, valued by an approved valuer. However, the valuation officer to whom the matter was referred by the WTO valued the property on the basis of land and building method and arrived at the value. The AAC found that the entire property had been let out and, therefore, adopted the rental basis for valuation as an initial step and arrived at the value of Rs. 25 lakhs, On the basis of land and building method, the value arrived at was Rs. 42.3 lakhs. In view of the vast disparity between the two values, he adopted the average method. On appeal, the Tribunal upheld the order passed by the AAC. On reference: HELD In view of the decision of the same High Court in Smt. Neelaveni's case [1980] 125 ITR 665 , wherein it was held that it is usual to value the properties by more than one method so as to cross-check and adopt an average when there is great disparity between the valuation arrived at by different methods, it was to be held in the instant case that the Tribunal was right in law in upholding the order of the AAC. Note: The case was decided in favour of the assessee. CASE REFERRED TO Smt. S. Neelaveni v. CWT [1980] 125 ITR 665 (Kar.). G. Chandrakumar and S.R. Shivaprakash for the Applicant. G. Sarangan and K. Gajendra Rao for the Respondent. JUDGMENT K. Shivashankar Bhat, J.-The following question was referred under the provisions of the Wealth-tax Act, 1957 : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in upholding the order of the Appellate Assistant Commissioner who directed the Wealth-tax Officer to adopt the average of the value as per the rent capitalisation method and land and building method ?" The assessee is an individual owning a theatre complex in Bangalore. Though, initially, in the wealth-tax returns, the…

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