TaxTMI 
TaxTMI 
2011 (5) TMI 379
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....red to in the statement of case have been dealt with by us in WTR 28/1992 and WTR 29/1992. The said references were disposed of by us by orders of even date, i.e., 01.04.2011. 2.2 There is another aspect of the matter which we would also refer to at this juncture itself. This is with respect to the fact that even though the questions of law which we are presently required to adjudicate upon, at the behest of the revenue, the revenue for reasons best known, has not filed a paper book in support of its references/appeal(s) to place on record documents, which according to it would be necessary for adjudication. Why this aspect is important, would become evident shortly, as we proceed to adjudicate upon the questions culled out below. 3. The questions which we need to adjudicate upon are as follows :- (i). Whether on the facts and circumstances of the case, the Tribunal was right in holding that the land in question has to be valued at Rs.847/- only for the purposes of Wealth Tax and not at Rs.2,77,64,000/-. (ii). Whether on the facts and in circumstances of the case the Tribunal was right in holding that the value of the land situate in village Gadaipur which has been decl....
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.... valued, at the premium paid by the it, which was a sum of Rs.847/-. As indicated above, the Assessing Officer disagreed and applied the Government rate of Rs.2200/- per sq. metres. 5. Before us, arguments were advanced on behalf of the revenue by Mrs. Bansal, Sr. Advocate assisted by Mr. Deepak Anand, Junior Standing Counsel whereas Mr.Syali, Sr. Advocate assisted by Ms. Husnal Syali and Mr. Rahul Sateeja, Advocates argued on behalf of the respondent. 5.1 Mrs. Bansal submitted that the land in issue, even though a leased property, was a valuable piece of property which was located at Raisina Road, New Delhi. The land in issue was transferrable albeit with the permission of the lessor. The Tribunal by virtue of the impugned judgment had given unnecessary weightage to the clauses in the lease, which according to her, had been erroneously read as creating an impediment in the transfer of rights in the land in issue. Mrs. Bansal thus contended that the land in issue had to be valued at least at the official rates prevalent in the area, if not the actual market rates. 6. As against this, Mr. Syali drew our attention to the impugned judgment of the Tribunal wherein refer....
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....ful for the lessor to re-enter the land in issue and, cease and determine the lease; (viii). Similarly, under clause (IV) (3), if the land in issue or any part thereof was required for public purpose, the lessor, inter alia, could re-enter it. 7.1 Based on the aforesaid covenants, the Tribunal agreed with the assessee that the premium charged had to be the basis for valuing the rights in the land in issue. In coming to this conclusion, the Tribunal has not only given weight to the covenants which have been referred to hereinabove, by us, but also to the permission granted by the Lieutenant Governor under section 19(1)(vi) of the ULCRA. 7.2. It would be important to note at this juncture, that it was argued by Mrs. Bansal based on the following observations of the Tribunal that it was not as if the assessee was prohibited from transferring interest in the land in issue, so long as, it is used as a club. The observations of the Tribunal in this regard, on which reliance was placed, are contained in paragraph 10 of the impugned judgment, which read as follows :- "The concerned permission to retain the excess land is at page 75 of the paper book and the permission to hold the ....
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....of buying the same. In our view, therefore, it would be reasonable to value the assessee's rights in the said land only at Rs.847/-, which is the premium paid by the assessee therefor. We, therefore, direct that the land in question will be valued at Rs.847/- only and not at Rs.2,77,64,000/-" 7.7 In our opinion, what emerges is that the assessee could use the land in issue and the buildings constructed thereon only for the purposes of a club. The permission that was granted was only qua the assessee. The permission of the Lieutenant Governor obviously could not have been one in rem since the applicant was the assessee. The provisions of section 19(1) (vi) of ULCRA as prevalent at the relevant point in time, make it clear that while, exemption from other provisions of ULCRA was available in respect of vacant land held by certain kinds of entities including a club, the exemption was not automatic. The exemption was required to be granted by the concerned State Government having regard to: the nature and scope of activities of the entity, and the extent of vacant land required bonafide for the purposes of the club and, any other relevant factors. Thus, the Tribunal was right in hol....
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....ng 3 bighas 2 biswas as agricultural land, while the other portion measuring 4 bighas was shown as being used for the purposes of running a tubewell. Both these parcels of land which were equivalent to approximately 3200.68 sq. metres were excluded from Wealth Tax under the provisions of section 40(3)(v) of the Finance Act, 1983; being agricultural land. 8.2 Pursuant to the aforementioned adjustment, the assessee was left with only 246 bighas (i.e., 2,07,332.26 sq. metres) of land. By a notification dated 22.03.1979, issued under ULCRA, this piece of land was declared as surplus. The assessee filed an appeal against the said action, which was dismissed. Consequently, a notification under section 10(3) of ULCRA was issued on 15.10.1980. Though the said notification was published in the official Gazette the possession of the land was not taken over for reasons best known to the concerned authorities. 8.3 The Assessing Officer, in these circumstances, took the view that since the possession of the land in issue had not been taken, the assessee continued to be its owner and hence, after calculating its value for the purpose of Wealth Tax, brought it to tax. 8.4 In appeal, the ....
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....ee was put had been specifically excepted by the Repeal Act by virtue of provisions contained in section 3(2)(a) of the Repeal Act. This submission was however given up by Mr. Syali realizing the folly of his approach. The learned counsel conceded that the assessees case did not fall within the ambit of the saving clause of the Repeal Act i.e., Section 3(2)(a) of the Repeal Act. 8.8 Mr. Syali, however, contended that this court was required to consider the situation as it obtained in the relevant assessment years spanning from 1984-1985 to 1989-1990 and in the assessment years 1991-1992 to 1992-1993. According to Mr. Syali, in each of the assessment years, what the court would have to take into consideration was, the state of the law on the valuation date. The valuation date being the last day of the previous year of the assessment year in which the wealth tax had to be assessed. Based on this, it was submitted by Mr Syali that the Repeal Act would not be applicable as it was brought into force much later; the relevant date being the valuation date obtaining in each of the assessment years. Mr. Syali contended that if the revenues contentions were to be accepted the Repeal Act w....
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....anding judgment of any court to the contrary; and (c) the Repeal Act would not affect payment made to the State Government pursuant to exemption granted under Section 20(1) of the SICA. 9.4 Sub-Section (2) of Section 3 envisages a slightly different set of circumstances. The provision even though it appears under the title „saving encompasses a slightly different situation. A reading of the provision seems to suggest that, it mandates that, even where notification has been issued under Section 10(3) of the Act but possession has not been taken over by the State Government (or by any other person duly authorized by the State Government in that behalf or even by the competent authority) and that despite this circumstance, the State Government has paid money in respect of such land, then the said land shall not be restored unless amount paid by the State Government is refunded. The provision, therefore, seems to suggest that where a notification under Section 10(3) of the ULCRA had been issued but the possession had not been taken over, the Repeal Act would get attracted. However, where the State had paid a whole or part of the amount even though no possession of the l....
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....nbsp; (c) Any payment made to the State Government as a condition for granting exemption under sub-section (1) of section 20. (2) Where (a) any land is deemed to have vested in the State Government under sub-section (3) of section 10 of the principal Act but possession of which has not been taken over by the State Government or any person duly authorized by the State Government in this behalf or by the competent authority; and (b) any amount has been paid by the State Government with respect to such land, Then, such land shall not be restored unless the amount paid, if any, has been refunded to the State Government." 9.7 As indicated by us hereinabove in our view, as correctly conceded by Mr Syali the land in issue would not fall within the four corners of Section 3 of the Repeal Act. In the instant case it is not disputed that even though a notification under Section 10(3) of the ULCRA had been issued, the concerned State had neither taken over the possession nor paid any money to the assessee - though as discussed hereinabove if money had been paid it would have only delayed the restoration of the ownership of land from the State Government to the erstwhile owner till th....
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....o be the assessees asset. That situation having been reversed, in our view the logical sequitur would be that Tribunals judgment on this aspect would have to be set aside. Accordingly, the question raised before us has to be answered in favour of the revenue and against the assessee. 10. We may only observe at this juncture that the judgment of the Karnataka High Court in the case of Sri Srikantadatta (supra) is not pari materia as it did not deal with the facts in issue, in the instant case. In that case, the Division bench of the Karnataka High Court had been called upon to adjudicate upon the following question of law: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the value of the vacant land, in Bangalore Palace, belonging to the assessee should be taken at Rs 2,00,000/- for the purpose of the wealth-tax assessment for the years in question?" 10.1 The Court after referring to several Supreme Court and High Court judgments observed that under Section 7(1) of the Wealth Tax Act, 1957 to arrive at the fair market value of an asset, on the date of valuation, it would not only have to be assumed notionally that there was ....