High Court Of Madras
Commissioner Of Wealth Tax vs. Simpson & General Finance Co. Ltd. (No. 2)
Section WT 7(1)
Asst. Years 1991-92, 1992-93, 1993-94, 1994-95
P.D. Dinakaran & P.P.S. Janarthana Raja, JJ.
Tax Case (Appeal) Nos. 1452 to 1455 of 2005 & TCMP Nos. 1238 to 1240 of 2005
30th June, 2006
Counsel Appeared
Mrs. Pushya Sitaraman, for the Appellant
JUDGMENT
P.D. Dinakaran, J. :
The tax case appeal Nos. 1452 to 1455 of 2005 are directed against the order of the Tribunal in MP Nos. 188 to 191/Mad/2004 in WTA Nos. 258 to 261/Mad/1996 dt. 5th Nov., 2004 for the asst. yrs. 1991-92 to 1994-95.
2. The Revenue is the appellant. The assessment years involved are 1991-92 to 1994-95. The assessee filed a return of wealth for the asst. yrs. 1991-92 to 1994-95. It was found that the value adopted for the property situate at Sembiam and Madhavaram was very low. The values were obtained from the DVO, and the AO fixed the value based on the Valuation Officer’s report.
3. Aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). The CIT(A) following the Tribunal’s order for earlier years directed the AO to redo the assessment as per the Tribunal’s directions for the earlier years.
4. On further appeal by the Revenue before the Tribunal, the Tribunal dismissed the appeal holding that the property should be valued as per the compensation payable under the Tamil Nadu Urban Land (Ceiling and Regulation) Act, as it would come within the purview of that Act.
5. Aggrieved against the same, the Revenue has preferred these appeals raising the following substantial question of law : “Whether, on the facts and circumstances of the case, the Tribunal was right in holding that the immovable property subject to urban land ceiling laws should only be valued as per the compensation payable under the Urban Land Ceiling Act ?”
6. The issue in the above question of law was decided against the Revenue by this Court in the case of CWT vs. K.S. Ranganatha Mudaliar (1984) 150 ITR 619 (Mad), wherein this Court held that : “if the restrictions and prohibitions contained in the Ceiling Act were ignored in valuing the excess land, that would amount to valuing the asset differently in content and quality from that actually owned by the assessees. Consequently, such lands would have to be valued only after taking note of the restrictions and prohibitions, which would have the effect of depressing its value. Hence, the valuation on the basis of compensation receivable under the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961, was justified.”
7. In the case of CIT vs. R. Padmavathy Ammal (1997) 143 CTR (Mad) 384 : (1998) 230 ITR 922 (Mad) a Division Bench of this Court following the abovesaid decision held that : “When the value of the lands was determined by the Government, the Government heard the claimants and took into account the character of the land, the value of the land in the nearby vicinity and other advantages and disadvantages with regard to the location
of the land, etc. Therefore, it could not be said that the value determined under the Land Ceiling Act would be something different from the value determined under the Guideline Valuation in accordance with the WT Act, 1957 and WT Rules, 1957.”
8. Also, following the ratio laid down in K.S. Ranganatha Mudaliar case (supra), the Gujarat High Court in a case of CIT vs. G.S. Krishnavati Vahuji Maharaj Kalyanraiji Temple (2003) 185 CTR (Guj) 503 : (2003) 264 ITR 517 (Guj) held as under : “Whenever there is any restriction on the transfer of any land, it is a matter of common knowledge that the value of the property or land, as the case may be, would be normally reduced. In the instant case, it was not open to the assessee to sell the land and, therefore, the value of the land in question cannot be more than what the Government was to offer to the assessee under the provisions of the Ceiling Act.” This Court in Tax Case (Appeal) Nos. 931 and 932 of 2005, dt. 26th Oct., 2005, in the assessee’s own case (CWT vs. Simpson & General Finance Co. Ltd.) following the Gujarat High Court decision in CIT vs. G.S. Krishnavati Vahuji Maharaj Kalyanraiji Temple (supra) held that the immovable property subject to urban land ceiling laws should only be valued as per the compensation payable under the Urban Land Ceiling Act.
In Tax Case Nos. 365 and 366 of 1999, a Division Bench of this Court by judgment dt. 20th March, 2003 (CWT vs. Shardlow India Ltd.) [reported at (2004) 187 CTR (Mad) 648—Ed.] following the decision reported in CWT vs. K.S. Ranganatha Mudaliar (supra) dismissed the appeals filed by the Revenue on the very same issue involved in these appeals. It is also relevant to point out that the Special Leave Petition filed by the Revenue before the apex Court was also dismissed on 2nd April, 2004, in SLP (C) Nos. 7288-89 of 2004.
In view of the above settled law, we are of the considered view that the Tribunal was right in holding that the immovable property subject to urban land ceiling laws should only be valued as per the compensation payable under the Urban Land Ceiling Act. Accordingly, the question of law referred to above is answered in the affirmative, against the Revenue and in favour of the assessee. The appeals are dismissed. No costs. Consequently, TCMP Nos. 1238 to 1240 of 2005 are also dismissed.
[Citation : 285 ITR 431]
