Law:

Section:

Wealth tax--- ----Reference---Valuation of assets---Conflict of opinion between High Courts---Whether value of land should be added while valuing property on rent capitalisation method---Is question of law to be referred---Indian Wealth Tax Act, 1957, S. 27(1). Whether the tribunal was right in holding that the value of the land should not be added while valuing the property on the rent capitalisation method is a question of law to be referred. CWT v. Ram Saran Kajriwal (1987) 168 ITR 485 (All.) and Ramachandran V.C. v. CWT (1980) 126 ITR 157 (Kar.) ref. JUDGMENT A.R. TIWARI J.---The applicant Commissioner of Wealth Tax, Bhopal has filed this application under section 27(3) of the Wealth Tax Act, 1957 (for short "the Act"), seeking direction to the Tribunal to state the case and refer the proposed two questions of law, as extracted below, arising out of the order, dated January 17, 1990, passed by the Tribunal in W.T.A. Nos.36 and 65/Ind of 1989 relating to the assessment year 1986-87 for our opinion: "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the order of the Commissioner of Wealth Tax (Appeals) holding that the value of the land should not be added while valuing the property on the rent capitalisation method? (ii) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in confirming the order of the Commissioner of Wealth Tax Appeals holding that the interest rate of 11 per cent. should be applied on deposits received from tenants for working out rent receivable by the assessee against the rate of 15 per cent. applied by the Valuation Officer?" Briefly stated, the facts of the case are that the assessee (non-­applicant) constructed 40 shops on a leasehold land. For the assessment year 1986-87, the assessee declared the value of the shops at Rs.3,48,089 on the basis of cost of construction which she subsequently revised on the basis of the approved valuer's report indicating Rs.4,30,000. In the assessment, for the assessment year 1986-87, the Wealth Tax Officer on the basis of the report of the Departmental Valuer determined the value at…

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