Unconfirmed allotment and bona fide auction price governed asset valuation, while the section 33(1)(n) claim was allowed.

An unconfirmed allotment cannot justify an enhanced asset valuation where the only ascertainable value is the amount actually deposited; the deposited sum was treated as the correct value for the Okhla plot. A bona fide public-auction price was accepted as fair market value for W-2/7, West Patel Nagar, because the sale reflected an open market transaction and no material supported any upward revision. The claim for deduction or exemption under section 33(1)(n) for house No. 14/14, East Patel Nagar, was also allowed on the basis of the CBDT circular. The ratio is that an unconfirmed asset cannot be valued beyond proven consideration, and a genuine auction price may be adopted absent contrary evidence.

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Issues: (i) Whether the valuation of the Okhla plot at Rs. 1,00,000 was justified, (ii) whether the valuation of property W-2/7, West Patel Nagar, New Delhi, at Rs. 6,00,000 was sustainable, and (iii) whether deduction or exemption under section 33(1)(n) was allowable in respect of house No. 14/14, East Patel Nagar, New Delhi.

Issue (i): Whether the valuation of the Okhla plot at Rs. 1,00,000 was justified.

Analysis: The plot allotment had not been finally confirmed even several years after the deceased's death, and the only concrete asset value shown was the amount deposited with the DDA. In such circumstances, the deposit amount alone could be treated as the asset value, and no enhanced valuation could be sustained on the basis of an unconfirmed and disputed allotment.

Conclusion: The valuation was not justified and only the deposited amount was to be taken as the asset value, in favour of the assessee.

Issue (ii): Whether the valuation of property W-2/7, West Patel Nagar, New Delhi, at Rs. 6,00,000 was sustainable.

Analysis: The property had been purchased in a public auction for Rs. 5,70,000, the sale was subject to confirmation, and the auction was later confirmed by the High Court. Since the auction reflected an open market transaction and there was no material basis for enhancement, the auction price represented the fair value as on the date of death.

Conclusion: The higher valuation was unsustainable and was substituted by Rs. 5,70,000, in favour of the assessee.

Issue (iii): Whether deduction or exemption under section 33(1)(n) was allowable in respect of house No. 14/14, East Patel Nagar, New Delhi.

Analysis: The first appellate authority had declined the claim on the view that the property belonged to the firm and not to the deceased. The claim was held allowable on the basis of the CBDT circular cited on the point, which supported the assessee's entitlement to the deduction or exemption.

Conclusion: The claim under section 33(1)(n) was allowable, in favour of the assessee.

Final Conclusion: All the substantive issues were decided in favour of the accountable person, and the assessment was set aside to that extent by allowing the appeal.

Ratio Decidendi: Where an asset is not finally acquired or confirmed, its value cannot be enhanced beyond the amount actually and conclusively established; and a bona fide auction price may be accepted as fair value in the absence of contrary material.

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