Property valuation under Wealth-tax Act requires reliable market evidence; tenant occupation and rent control restrictions defeated enhancement.

Valuation of the leased property under the Wealth-tax Act had to rest on reliable evidence of market value, and the Tribunal lacked material to enhance the valuation to Rs. 10 lakhs. The alleged commercial character of the locality was too vague, because no clear evidence showed that the user of the property could realistically be changed from residential to commercial. The cited sale instances were not comparable, as one involved vacant possession and special physical advantages and the other was only an aborted agreement to sell involving vacant property. Since the property remained substantially tenant-occupied and section 14 of the Delhi Rent Control Act restricted eviction and demolition, there was no basis for treating it as having real commercial redevelopment value.

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Issues: Whether there was material before the Tribunal to value the property at Rs. 10 lakhs on the valuation date.

Analysis: The reference arose under section 27(3) of the Wealth-tax Act, 1957. The valuation had to rest on reliable evidence of market value. The alleged commercial character of the locality was too vague, because no clear material showed how the user of the leased property could in fact be changed from residential to commercial. The two cited sale instances were not comparable: one involved vacant possession and special physical advantages, while the other was only an aborted agreement to sell and also involved vacant property. The property in question remained substantially occupied by tenants, and the restrictions under section 14 of the Delhi Rent Control Act, 1958 prevented eviction and demolition, thereby limiting any real commercial redevelopment value.

Conclusion: There was no material to support enhancement of the valuation to Rs. 10 lakhs, and the question was answered in the negative in favour of the assessee.

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