1987 (2) TMI 145 - AT - Wealth-tax

Tribunal Decision on Property Valuation, Trust Assets Inclusion

The tribunal rejected the assessee's challenge to the valuation of self-occupied property and denied permission to raise the applicability of a rule for ... Discretionary Trust, Deemed Wealth Issues Involved:1. Valuation of self-occupied property.2. Valuation of tenanted property.3. Inclusion of agricultural lands owned by trusts in the assessee's wealth.Issue-wise Detailed Analysis:1. Valuation of Self-Occupied Property:The assessee challenged the valuation of self-occupied property at Rs. 1,89,460 instead of Rs. 87,700 for A.Y. 1975-76 and Rs. 1,97,600 instead of Rs. 98,700. The assessee sought permission to raise the issue of the applicability of rule 1BB to pre-1979-80 assessments, arguing it as a purely legal issue. However, the D.R. opposed this late-stage issue-raising, citing the lack of data on record. The tribunal rejected this ground, stating, 'we do not see any justification for embarking on a new exercise of gathering all new data and applying the same now.'2. Valuation of Tenanted Property:The valuation of the property at Ruo Afonso Albuguerque Road, Panaji, was contested, with the assessee proposing the deduction of reversionary values from the gross value. The tribunal, after hearing both sides, concluded that since the property was already tenanted, no separate addition on account of reversionary value was necessary. This ground was 'partly allowed for 1975-76 and 1976-77.'3. Inclusion of Agricultural Lands Owned by Trusts:The inclusion of certain agricultural lands owned by two trusts in the assessee's wealth was a complex issue. The assessee contended that the trust was discretionary and that he had no valuable interest for inclusion in his wealth. The trust deed specified that the beneficiary was the assessee and his wife and children if born before the distribution date (9-8-1988). Clause 3 of the trust deed allowed for the accumulation of income for the benefit of any one or more of the beneficiaries at the trustees' discretion, with the assessee being the sole beneficiary during his minority.The tribunal examined the trust deed and concluded that on the respective valuation dates, the interest of all potential beneficiaries was so remote that they could not even be said to be contingent. 'The assets were held on the relevant valuation date for the sole benefit of the assessee.' The tribunal also noted that after the assessee attained majority, he had the power to wind up the trust, extending his interest to the entire property of the trust.The tribunal held that the inclusion of the entire wealth of the trust was justified, stating, 'A prospective buyer would offer to the assessee full market values of the trust properties, if only the assessee is persuaded to exercise his power under clause 28.' Consequently, the appeals for 1975-76 and 1976-77 were partly allowed, while the appeals for 1977-78 and 1978-79 were dismissed.