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C.W.T. v. S. Kumar - WEALTH TAX REFERENCE No. 14 of 1993  RD-AH 4569 (21 October 2005)
W.T.R. No. 14 of 1993
Commissioner of Wealth Tax , Meerut
Shri Surendra Kumar, Indl. 59-B, New Mandi, Muzaffarnagar.
Hon'ble R.K. Agrawal, J
Hon'ble Prakash Krishna, J
(Delivered by Hon. Prakash Krishna, J)
The Income Tax Appellate Tribunal, New Delhi has referred the following questions of law for the opinion of this Court, under the Wealth Tax Act (hereinafter referred to as the Act) :-
(1). "Whether on the facts and in the circumstances of the case, the I.T.A.T. was legally correct to confirm the order of the CWT (A) on the point of valuation of assessee's interest in M/s G.D. and Sons. ?"
(2). ''Whether on facts and in the circumstances of the case, the I.T.A.T. was legally correct to uphold the order of the CWT (A) on the point of allowability of deduction u/s 5 (1) (iv) of the W.T. Act, 1957 in the hands of partners in respect of property owned by the firm.?"
The matter relates to the assessment year 1968-69 and 1969-70. The assessee had a share in M/s G.D. and Sons. The dispute relates to the valuation of the property known as Alpana Cinema being property of partnership firm M/s G.D. & Sons in which the assessee had 15% share and had impressed it with the character of HUF and later on the same was partitioned. As a result thereof he received 1/3 of 15% share of M/s G.D. & Sons. The dispute relates to the method of valuation of Alpana Cinema Building. It was valued by the Wealth Tax Officer on "Land and Building" method. However, the Income Tax Appellate Tribunal following its order in the case of other partners of the said firm, held that the valuation of such property should be made on yield/rent capitalization method.
Having heard the learned counsel for the parties, we are of the opinion that the Wealth Tax Officer was justified in adopting the " Land and Building" method. In our opinion yield/rent capitalization method would not be correct method of valuation of the property in question, in as much as even if there is loss in the business or in other words there is negative income , it can not possibly be said that the property in question has no marketable value. We have discussed the matter in great detail in WTR 39 of 1985, CWT Vs.. Bankey Lal and others decided today.
For the reasons given in the aforesaid WTR No. 39 of 1985, CWT Vs.. Bankey Lal and others we answer question no.1 in the negative i.e. in favour of the Revenue and against the assessee.
So far as question no.2 is concerned , this Court in CIT Vs. Sri Jai Kishan Gupta 2004 U.P.T.C. 462 has taken a view that the Cinema Building is not a residential building and as such a co-owner of such property is not entitled to claim deduction under Section 5 (1) (iv) of the Act.
We accordingly, answer question no.2 also in the negative i.e. in favour of the Revenue and against the assessee. There shall be no order as to costs.
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