TaxTMI 
TaxTMI 
1993 (9) TMI 161
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....olished then the Moradabad Development Authority had placed restrictions on the sale of the land. He had also observed that the properties owned by seven partners and when all the members of the family are concerned, since some of the partners represented their HUFs, there would be as many as 21 persons owning the properties. The land rate, in view of development around the cold storage has been reduced by 15% because of restriction that have been placed by the Moradabad Development Authority on sale of land beyond the normal limits allowed for residential purposes. The approved valuer also had noted that there are no sewer lines and the assessee had made its own arrangement for water supply through the tubewell. The rates of cost of construction as per the PWD Schedule of 1979-80 have been taken into account in valuing the properties. He had observed that in view of various restrictions as explained earlier, the best method of valuation of such type of building which is very old, containing out-dated method of storage, is the yield capitalisation method. Shri K.C. Srivastava submitted that the land rates adopted by him are based on the notifications that were issued under section ....
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....------------------------------------------------- Gross Value 18,39,100 22,37,109 24,14,945 28,81,053 Deduction 25% 75,875 1,06,225 1,21,400 1,71,477 being fully developed land and structure having no salvage value. Deduction for 1,83,918 &n....
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....nbsp; Assessment year --------------------------------------------------------------------------------------------------------------------------------------------------- Particulars 1981-82 1982-83 1983-84 --------------------------------------------------------------------------------------------------------------------------------------------------- Land & Building &nb....
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....s always a very difficult task. Shri Srivastava submitted that if we proceed on the assumption that there would be a willing buyer then the property being a commercial property, he would place emphasis over the income of commercial properties which that property would generate. In fact, every buyer when he buys the property as an investment or as a business asset would always visualise the return of such an investment, whether it would be fast so as to recoup the investment and whether it would also leave him sufficient margin so as to ensure growth of its capital or not. He submitted that though the assessee's valuer had proceeded on the land and building method, he had stated that in such kind of valuation, the proper method would be capitalisation of the yield from the property. Shri Srivastava contended that he is well aware of the fact that profit is a variable factor which would never be uniform over the years and if in the years when there are no profits or very little profits are also taken into account then it would give a distorted picture of the value of the property. He pleaded that it is always an accepted principle that in valuing the property based on yield from that....
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....al valuer is clear when the valuation is compared with the book value of the building. The book value of the building after allowing of depreciation is in the range of Rs. 7 lakhs while the same had been valued at a little over Rs. 47 lakhs and it has further gone up in the subsequent years. He submitted that the valuation that is not based on real factor such as disadvantage, draw backs of old type of construction, old type of machinery, surrounding areas restricting the movement of the commodities in and out of cold storage leading to reduced income generation. He submitted that when there are so much of restriction in the operation of cold storage, to claim that the building has a large value would be totally improper. He submitted that the land value that has been adopted by the D.R. by resorting to the notification that has been issued by the Distt. Magistrate in 1984. He contended that since the prices/cost index had been going up over the years, to say that the value in 1984 would hold good for the property in Dushera 1980, 1981, 1982 and 1983 is clearly not proper for the value should be very less. Shri Srivastava brought the fact of the assessee's claim of improper authori....
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....er did not readily have in his possession the basis of such determination of cost index, he pleaded that this was based on certain factors and therefore cannot be regarded an ad hoc assumption. He placed reliance on Rustom Cavasjee Cooper v. Union of India AIR 1970 SC 564 for the proposition that where the land is fully developed and there is absolutely no control of any sort by the Govt. in property, the proper method of valuing such a property is not necessarily rent capitalisation. He also placed reliance on T. Kanagasabapathi Pillai v. CWT [1964] 51 ITR 146 (Mad.), in which decision it was held that the method of capitalisation of valuing the property should be adopted as the last resort. The Valuation Officer submitted that the method of construction of the cold storage as was in existence in 1962, 1966, 1976 etc. are still being adopted with the only variation of the type and method of providing various kinds of coils etc. that is some adopt and use one entire floor covering up the various pipe lines and things like that while the assessee had used a different technology. The technology that uses are on entire floor for laying of pipe lines results in less of storage space, w....
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....cash for the purposes of this Act, shall be estimated to be the price which in the opinion of the Assessing Officer, it would fetch if sold in the open market on the valuation date. Sub-section (2) of section 7 prescribes the value of properties that are used in a business, separately for each kind of the assets used in the business. The reading of this section implies that the value of any asset need to be estimated, that estimate should be based on an hypothetical market i.e., the open market on the valuation date, implying the existence of a willing buyer and the willing seller. It is an accepted principle that the method of valuation that is adopted for wealth-tax purposes should be that which is more objective and provides reliable data rather than mere subjective opinion. The law enjoins determination of the fair market value which does not necessarily mean which is favourable to either the assessee or the revenue. The Gujarat High Court in CIT v. Smt. Vimlaben Bhagwandas Patel's [1979] 118 ITR 134 had observed the proposition that when different methods of valuation of the property give different prices, the price that should be adopted is that which is the minimum. However,....
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....by various pipe lines and other cooling chambers and thereby it restrict the usage of the building to only one business namely cold storage. It is on this consideration that the Tribunal in the two cases cited by the assessee, which took into account the valuation of the cinema building which building was capable of being used only for exhibition of films and with modifications only the building could be used for any other business, the conclusion was that the reasonable method of valuing the property would be the capitalising the net yield or the net income, which method gave the reasonable value and whether such a method is proper being purely a question of law, notwithstanding that the assessee returned the value on land and building method, it would be entitled to claim for adoption of the yield method, merely because the assessee had pleaded for adoption of the yield method, for valuation of the property, it is not necessary for the Courts to accept the same unless the situation warrants it. We have observed earlier that the building is capable of being used only as cold storage and therefore in the light of the decisions of the Tribunal we would adopt the yield method for val....