TaxTMI 
TaxTMI 
TaxTMI 
1985 (9) TMI 117
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....e net wealth. In the Cross objections, the assessee has challenged these two last points. 3. On 23rd May, 1968, the assessee purchased a double storeyed building known as 'Brine Cole' from Shri Bharat Bhhosan for a sum of Rs. 3,15,000. He was residing in this property. on 1st Jan., 1972, the assessee entered into an agreement for the sale of his property to M/s Gautam Builders. Under the agreement the said property was sold to M/s Gautam builders for the purpose of its development and the construction of a new building as per plans and specifications approved by the Corporation and to be sold to various purchasers on ownership basis. The land covered by the property admeasuring 2741 sq. yds. was to be transferred for a consideration of Rs. 4,93,380 being Rs. 180 sq. yds. A sum of Rs. 25,000 was paid by the purchaser the Vendor as earnest money. The agreement also provided for allotment to the assessee of two flats; one of 1,300 sq. ft. and another 3,000 sq. ft. The purchasers were to charge the assessee Rs. 65 per sq. foot as consideration for the flat and Rs. 33 per sq. foot for the terrace portion covered. The assessee was also to be given a cottage of area of 700 sq. ft. or th....
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....making a total of Rs. 7,73,050. The value of the land on which the cottage stood was in the above computation taken at Rs. 300 per sq. yd. And the balance of land at Rs. 40 per sq. yd. No amount was included in the net wealth on account of the voluntarily disclosed amount of Rs. 66,620. 5. The WTO referred the valuation of this property to the Department Valuer under s. 16A. The valuer submitted his valuation report for all the four years under appeal. For the asst. yrs. 1973-74 and 1974-75 the Valuer adopted a valuation of Rs. 8.61 lakhs and Rs. 9.30 lakhs respectively. For the asst. yr. 1975-76, he adopted a value of Rs. 10,25,440 whereas for the asst. yr. 1977-78 he adopted a value of Rs. 20,54,586. The WTO completed the assessment for all these years adopting the value of the property as given by the District Valuer. He also included the sum of Rs. 66,620 as an extra asset to be included in the net wealth. 6. On appeal, the CIT(A) went in detail into the valuation of this property. He found that the Departmental valuer has not taken into account the real nature of the property belonging to the assessee during these years. The Valuation Officer took the value of the land, th....
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....ld be taken into account. For this purpose he relied on the order of the Tribunal in the income-tax case laying down that the income from the four flats and the cottage alone should be taken for computing the property income. 7. The ld. counsel for the Department challenging the valuation for this asset adopted by the CIT(A) for all the years has pointed out that the Departmental Valuer has given the correct valuation of this asset which should be adopted for all the years. The assessee has not charged the proper value for the land. Apart from the ownership of the land and other assets going with it during the period of construction of the multi-storeyed building, the assessee had also got the expectation of the flats in the new building as well as the cottage constituting his asset. The Departmental Valuer has, therefore, property included in the value of this assets these components also. 8. For the assessee stress is laid on the detailed orders of the CIT(A). The Departmental Authorities have not even correctly appreciated the nature of the asset to be valued, if not for all years, certainly for the first two years. The assessee's computation takes into account the amount du....
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....efore us by the parties, we find that the detailed working of the value of this asset made by the CIT(A) calls for no interference. The CIT(A) has also correctly appreciated the nature of the Voluntary disclosure made by the assessee specifically endorsing the fact that the sum of Rs. 66,620 disclosed by the assessee represented extra amounts invested by him by way of repairs, modifications etc. to the old house at Pali Hill. In view of the change in nature of this property from the double storeyed building purchased by the assessee, maintained, modified etc. by him during the years relevant for the years under appeal and against the background of the voluntary disclosure made, the commissioner has correctly directed that no extra asset representing the voluntarily disclosed amount should be included in the net wealth. On this point, therefore, we confirm the order of the CIT(A). 10. The WTO included for these years under appeal of the outstanding professional fees as assets. On appeal, the CIT(A) rejected the assessee's claim that the asset was without any value. He estimated the market value of this assets viz. professional fees as 50 per cent of the outstanding as disclosed by....
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....ecured nature etc. no amount in excess of an estimated fraction can be included in that net wealth. 12. The Supreme Court has laid to rest any controversy as to the assessability of this amount. The decision does not, however, lay down any hard and fast rule that the entire amount either billed by the assessee or regarded by him as due to him can be treated as the asset of the assessee. Each outstanding professional fees amount has to be evaluated for the purpose of inclusion in the net wealth with reference to the date of payment, the security for payment, the chance of recovery in the case of unsecured amount etc. As it is complete details not being available, as estimate for inclusion in the net wealth of this asset has to be made. The CIT(A) has made an estimate at 50 per cent of these outstanding. Considering the circumstances, it cannot be said it is an erroneous estimate. No interference is called for with his order on this point. 13. The assessee received a part of his remuneration from the producers for whom he worked, in the form of annuity policies. Under these policies, the producer took out a single premium life policy from the LIC on the life of the assessee. Unde....
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....teed surrender value, the assessee could recover part of the policy amount after a period, the amount goes to him as beneficiary and to its legal representatives and above all as far as the producer is concerned the entire amount has been deposited with the LIC. 15. For the assessee it is pointed out that the policies in all these cases cannot be surrendered. Communication is also not possible. The decision in Ahmed G. H. Ariff & Ors. vs. CWT (1970) 76 ITR 471 (SC) does not apply to this case. It on the contrary says that the receipts thereunder are not annuities. There is no justification for treating these annuities as representing the right to compensation and not as annuities at all. 16. In the light of the decision of the Supreme Court in CWT vs. Vyasyaraju Badreenarayana Moorthy Raju (1985) 45 CTR (SC) 217 : (1985) 152 ITR 454 (SC) and also in the wake of our decision in ITO vs. Bajaj Auto Ltd. (1984) 8 ITD 296 (Bom). It would not be proper to hold that a property in the annuity does not belong to the assessee. Normally, therefore, they are includible as assets in the net wealth. On the perusal of the policies, however, we find that the assessee is entitled to only annuit....