Law: Wealth Tax Act, 1957

Section: 27,25(2),16(1)

Wealth tax--- ----Valuation of asset---Commissioner---Revision---Land appurtenant to building--- Building constructed on very small portion of land---Registered valuer estimating land at reduced value on basis of encumbrance by building---Estimate accepted and assessments completed---Commissioner in revision directing reference to valuation cell on basis of guidelines in Board circular treating surplus land as not appurtenant to house---Order of Commission justified---Board's circular has direct bearing on power of Wealth Tax Officer in matter of valuation of assets---Indian Wealth Tax Act, 1957, Ss.7 & 25. The assessee owned a bungalow with an open area of land in the city of Ahmedabad. This asset was assessed at Rs.1,43,373 for .wealth tax purposes for the assessment years 1974-75 to 1977-78, on the basis of the report of a registered valuer who had estimated the value at Rs.35 per square yard but since the land was encumbered with a building, he had taken the effective value at 60 percent of the said value of the land. The Commissioner, in revision suo motu, held that the registered valuer was not justified in treating the entire plot of land at a reduced value on the plea that the land was encumbered with a building thereon. He referred to the circular of the Central Board of Direct Taxes which laid down the guidelines for valuation of land appurtenant to the house, according to which, in cases where a separate tenantable unit could be constructed on the excess land, such land could be considered as not appurtenant to the house and the matter regarding its valuation could be referred to the Valuation Cell The Commissioner observed that in view of the clear instructions of the Board, such surplus land was to be considered as not appurtenant to the house and the matter regarding its valuation was required to be referred to the Valuation Cell, and set the assessment aside with a direction to the Wealth Tax Officer to refer the question of valuation of the asset in question to the Valuation Cell. The Tribunal set the orders of the Commissioner aside on the ground that the Commissioner had no information with him to indicate the actual operation of. the…

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