Short note on Case Law 162-ITR-106 ( KAR ) - Dwelling unit on agricultural land claimed in Income tax

Short note on the case law 162-ITR-106 ( KAR )
Compiled by Mandar Gadre b.e.civil Regd Valuer Land and building

Karnataka High Court
M.A. Sreenivasan vs Commissioner Of Wealth-Tax on 7 October, 1985
Equivalent citations: (1986) 51 CTR Kar 115, 1986 162 ITR 106 KAR, 1986 162 ITR 106 Karn, 1986 24 TAXMAN 543 Kar
Author: K Puttaswamy
Bench: K Puttaswamy, S Hakeem
 Decision in Favour of the Assesse.

1.      The assessee had purchased  an extent of 10 acres 31 guntas of land situated at Rajmahal Village, Bangalore North Taluk, now part of a posh residential locality called Rajmahalvilas extension of the City of Bangalore, from the Maharajah of Mysore.
2.      Later the assesses constructed a bungalow on the same land where he spent @ ₹ 2.50 Lakhs some time in 1968-69.
3.       For the assessment years 1971-72 to 1974-75, relevant to the corresponding valuation dates, the assessee filed his returns under the Wealth-tax Act, 1957 ("the Act"), before the Wealth-tax Officer, Assessment-2. Circle-II, Bangalore, inter alia, claiming exemption of the value of the said residential building under section 5(1)(ivb) of the Act. On April 22, 1975, the Wealth-tax Officer by separate but identical orders completed the assessments for the said years and rejected the assessee's said claim for exemption. Aggrieved by the said orders of the Wealth-tax Officer, the assessee filed appeals before the Appellate Assistant Commissioner, Bangalore Range-II, who by his common order dated June 24, 1976, dismissed them. Aggrieved by the said orders of the Appellate Assistant Commissioner and the Wealth-tax Officer, the assessee filed second appeals before the Tribunal which by its common order dated May 27, 1977, dismissed them.
4.       Sri K. P. Kumar, learned advocate, appeared for the assessee. Sir K. Srinivasan, learned senior standing counsel, assisted by Sri H. Raghavendra Rao, learned junior standing counsel, appeared for the Revenue. Both the sides have relied on a number of rulings in support of their respective contentions. jSri Kumar has contended that on the facts that are not in dispute and found by the Tribunal, the claim made by the assessee for exemption of the value of the residential building under section 5(1)(ivb) of the Act was well-founded and the question, therefore, requires to be answered in favour of the assessee.
5.       To support this the following cases were referred.
a.        Maharajadhiraj of Darbhanga v. CIT, AIR 1928 Pat 468 Division Bench of Patna High Cour
b.        Rajendra Narayan Bhanja Deo v. CIT, AIR 1929 Pat 449 Full Bench of the Patna High Court
c.       Kanan Devan Hills Produce Co. Ltd. v. CWT [1968] 67 ITR 823, the High Court of Calcutta
d.       Kanan Devan Hills Produce Co. Ltd. v. CWT [1968] 67 ITR 823, the High Court of Calcutta
I The following section was referred
 The Act has been enacted to levy on the net wealth of those who fall within the provisions of the Act. The Act came into force from April 1, 1957. Section 2 of the Act defines certain terms occurring in the Act. Section 2(e) defines the term "assets" as including property of every description, movable or immovable, but does not include those excepted therein from time to time. Section 3 of the Act which is the charging section provides for levy of wealth-tax on the net wealth on the corresponding valuation date at the rates specified in the Schedule.jSection 4 of the Act makes detailed provision for determining the net wealth of different classes of assessees for computation of net wealth.

13. Section 5 of the Act provides for certain exemptions in determining the net wealth of an assessee and the consequent levy of wealth-tax under the Act. Section 5(1)(ivb) of the Act, that is material and that was in force, reads thus :
"5. Exemption in respect of certain assets. -(1) Subject to the provision of sub-section(1A), wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets not be icluded in the net wealth of the assessee -........
(ivb) one building or one group of building owned by a cultivator of, or receiver of rent or revenue out of, agricultural land :
Provided that such building or group of buildings is on or in the immediate vicinity of the land and is required by the cultivator or the receiver of rent or revenue, by reason of his connection with the land, as dwelling house, store-house or outhouse;"
14. This section exempts one building or one group of building owned by a cultivator or receiver of rent or revenue from out of the agricultural land. But the proviso subjects in to three conditions. Firstly, the building or group of buildings must be on the immediate vicinity of the agricultural lands. Secondly, the building or group of buildings must be used or required for carrying on agriculture on the agricultural lands or for collecting rents or revenue from those agricultural lands. Lastly, there should be connection or nexus between such building and the lands which itself can be used as a dwelling house, store-houses or as an outhouse. If these conditions are satisfied, then the cost of construction of the buildings or the group of buildings or the facilities or comforts provided therein, has no relevance to the claim for exemption. All these are matters for the assessee to decide and modulate.

Note : Above compilation is based on the data available on the web at
Reference Practical Valuation Vol 11 by  Shri B Kanaga Sabapathy and K Arun

 The court came to the conclusion that the ruling was in favour of the Assesse and against the Revenue.


Court Appearance in the United States of America as an Expert Witness.

Court Appearance in the United States of America
By Mandar Gadre

I got an opportunity to appear in the Court of Santa clara in United States of America last year in the month of Mar 2016. I could not write about this since the verdict of the case was not given. Recently the verdict has been given and now I can discuss about this matter.

However as a part of secrecy I am not allowed to disclose the name of my client. So I am presenting this case as the case of Mr X from Pune
This valuations were required by the Respondent ( my client ) in the divorce case filed by the Complainant ( Wife )

1.        Mr. X contacted me through his father who reside in Pune and he ( father ) briefed me about the properties.
2.        Mr X contacted me over the telephone and requested me to carry out the valuation of certain lands in Pune.
3.        On request of Mr X I visited 3 land properties in the presence of his father in the year 2015
4.        The properties were as follows
·                N A plot in Mann village
·                N A plot in pirangut
·                Farm house plot in Mugawade.
5.        The valuations were carried out and subsequently the reports were submitted in the court. The Complainant had also furnished valuations from her side.
6.        Respondents counsel pressed for out of court settlement but it failed, hence the respondent decided to go ahead with proceedings of the case. The court asked the Respondent to testify the Valuer in the court in connection with the valuation reports submitted.
7.        I was summoned by the Santa Clara Court in California in mid dec 2015 to appear in the Month of Mar 2016. I accepted the summons and sent them a scanned copy as per their rules by email to the court.
8.        I applied for the Visa and it was granted by the US Embassy .
9.        Again we carried out fresh valuation and prepared the reports, but the court did not allow the fresh reports and the old valuations reports were referred since they were already part of the case. The fresh valuation was carried out to state that there is no change in the status of the lands in terms of development etc.
10.      I reached USA and had an initial meeting with my client’s counsel. After the first meeting I realized that the Counsel was not aware of the many facts about the 7/12 extract, Index II etc. I spent a good time explaining how the procedure is carried out for registration of documents and the procedure till 7/12 extract in created. The Counsel had prepared a set of questions to be asked to me in the court about my report, but I realized they had to be reframed in a better manner.
11.      I gave the Counsel a series of questions in such a way that my entire reports would be read in the court in the form of question and answers.
12.      The day of the trial
a.   In USA a case is given either full day or a half day for a case. Our case had been allotted a full day for the proceedings.
b.   The day began with the argument between the Complainants Counsels and Respondents Counsel over the argument that the Expert Witness is not qualified to appear in this case. Our Counsel convinced the Judge that a fair chance should be given the witness to present himself. The Judge agreed and said she will decide whether the Expert Witness is competent to appear in the court.  Till this time I was out of the court in the respondents counsel’s room.
13.      The Court room in USA have a very good setup. All the courts are Air conditioned. The Judge is located at a higher place and the Respondents and Complainants have table and chairs to sit. A police officer is present to maintain the law and order. The witness box has a table and chair with audio system. The witness box is properly secured by balustrade. There are few chairs for those who want to witness the proceedings.
14.      I was summoned to appear before the court and I took the oath by raising of hand which is a standard procedure in USA. The Judge then questioned me over my CV and the original registration certificates and qualification of education were produced before the court which the court accepted and accepted me as an Expert Witness in this case.
15.      Our Counsel then started asking me questions one by one in respect to all the report , the questions were like
·   Did you visit the property ?
·   Who accompanied you ?
·   Did you do market enquiry ?
·   Why the ready reckoner rates in mentioned ?
·   Did you check the actual sale instances ?
·   And many more questions like this.
b.   I had furnished my reports with due diligence and the sale instance were mentioned in the reports. My entire report was read in the form of question and answers before the court. The proceedings were recorded and noted. It was difficult for the court to understand Indian way of English speaking so couple of time spellings were narrated to clear the confusion and mistakes while recording.
c.    The question and answer session lasted over 45 min where most of the question which the complainants counsel would have asked in his cross examination were dealt carefully which proved to be a good strategy for further proceeding.
d.   The Complainants Counsel took my cross for more than 2 hours. I am jotting down some part of the proceedings of the cross in the form of questions and answers so that the readers will understand about the cross examination.
Q – Did you visit the property on xyz date ?
A – Yes
Q- Who accompanied you ?
A – Father of the respondent
Q – Are you competent enough to carry out such valuations ?
A – To which my counsel ( RC )objected since I was admitted as an expert advice, The Court asked the Complainant’s Counsel ( CC ) to withdraw the question.
Q – How many valuations you have carried out for divorce cases?
A-  I have not kept track of it and RC objected saying that the Valuer has to carry out the valuation of properties and he has nothing to do with the result of the divorce case. The court accepted the reasoning the question was declined.
Q – You have not done valuation but just multiplied reckoner rate by area of land.
A – No , I have not multiplied reckoner rate and the area of land. Please read my report carefully.
Q – How have you arrived at the rate of land ?
A – Based on the actual sales recorded and the demand and supply in this area.
Q – Have you measured the land ?
A – No measurement of land was no possible but I have referred the registration document and the demarcation plan which was produced to me for the reference.
Q – Is the land levelled ?
A – No the land is sloping in one direction.
Q – You have multiplied the reckoner rate and area to arrive at the value ( 2nd time same question )
A – No I have not was my answer.
This same question was asked 9 times to which finally the Judge intervened and told the Complainant Counsel that the witness has answered this question with the same answer and you can not ask the same question again and again.
In this manner the cross was proceeding. The Complainant Counsel was trying to agitate me by asking same type of questions.
The lady Judge was completely impartial and had very good understanding of what was happening during the cross exmination. The Counsel was trying to deviate and delay the proceedings with the sole intention that the cross examination would remain incomplete and I would have had to appear again on the next date.
The Judge strictly clarified that the Cross examination should be complete today in any case.
Finally the Counsel produced a web based advertisements which were sourced from websites like, magicbricks etc. The counsel produced advertisement for sale of N A plots in the same project and said that this is a sale instance.
So I asked the Counsel again and again “ do you say that this is a sale instance “ to which the Counsel said “ Yes “. I requested the court to record this statement.
I then asked permission of the court to produce the actual sale instance printout which I had collected from the igrmaharashtra web site. The court had a look at it and even the Complainant’s counsel.
I explained the court that the Counsel is referring the advertisements and not sale instances. The sale instance has  date of registration. Registration number and other things.
Out of the three properties valued one land was a Fram house land. I was able to justify the valuation based on the sale instances and the explanation of difference between the N A land and the Farm land and it potential.

16.      My testimony was necessary since the valuation we had furnished was of ` 70 Lakhs for the farm house land and the figure in the mind of the counsel and the complainant was ` 522 Lakhs i.e a difference of @ 695000 USD. As per the state law in USA in case of divorce the division has to be 50% to each of the party. So if I had not attended the court, the respondent might have had to pay the complainant 50% of 695000 USD which is a big sum in USA.
17.     Result of this appearance was that after six months the verdict was given by the Court and the parties were either requested to do the out of court settlement or approach the Indian Judiciary system since the Respondents and the Complainants were not citizen of USA( they were green card holders ).
18.     My appearance in the court helped my counsel to save a huge amount of money and the divorce was granted on the same day of the trial.

Mandar A Gadre
F 9480


Srilanka Cycling Tour by Just Ride and LifeCycle

Srilanka Cycling Tour by Just Ride and Life Cycle coordinated by Mandar Gadre ( JustRide ) and Nachiket Joshi ( LifeCycle )

From 9th Jan 2016 to 16th Jan 2016

I wanted to cycle in Srilanka for a long time. I got inspired by the photographs and stories of my friends  Arun Kadekadi, Shrikant Gurjar and others who had toured Srilanka 2 years back,
Finally after a lot of deliberations and discussions  Jan 2016 was fixed for the trip.
Then the research on internet started. We decided to follow the route done by my friends. Then I started researching on internet about hotels, costs etc.
at First I charted the routes on Strava ( A premier sports application for tracking cycling, running etc. visit ).

Initially the  trip was to be purely a cycling trip but then got converted into cycling cum leisure trip.
I then contacted Snapstar tours for helping us choose the hotels and logistics arrangements.After lots of deliberations and discussion we finalized the hotels.

The SCT members were
Mandar Gadre
Nitin Bhalerao and Indu Bhalerao
Manoj Erande
Bhupal Patwardhan and Dr.Vasanti Patwardhan
Dr.Shirish Ghan and Dr.Swati Ghan ( Karkare)
Ramdada Jadhavrao and Asmita Jadharao and Master Mihir
Dr.Avanti Binniwale
Meena Barot

Indu, Vasanti and Asmita were our support system.

The  schedule  was
Day 1 10/1/16 Colombo to Hikkaduwa 92 km
Day 2 11/1/16 Hikkaduwa to Mirissa 52 km
Day 3 12/1/16 Mirissa to Nuwara eliya 250 km ( by bus )
Day 4 13/1/16 Nuwaraeliya to Kandy 75 km
Day 5 14/1/16 Kandy to Sigriya 90 km
Day 6 15/1/16 Sigriya jungle road ride 40 km 

We decided to carry our own cycles to Srilanka.Then we got the cycles serviced. and then got them packed at Life Cycle. The mechanics at Life Cycle were fast and efficient as they packed the cycles swiftly and neatly. They also explained to us how to assemble them.

The boxes were packed and ready to travel,
We started our journey by bus on 8th evening to catch a flight in Mumbai. The bus arrived on time and after loading the cycles we started for Mumbai .गणपती बाप्पा मोरयाच्या घोशात आमचा प्रवास चालु झाला.
We reached Terminal 2 of Shiv Chatrapati  Airport by 11 and proceeded for check in and customs. We missed upon a major point @ information of the cycles.
We had to explain the custom officer that the bikes are used and old. After lot of discussion he advised  us to write letters containing information of cycle frame number, colour and details of make etc on declaration and we got them stamped and proceeded for immigration and just made the flight on the last call.

Lesson learned

  1. Carry the bicycle bill with you.( If it is not available forget it )
  2. Know your cycle frame number ( which is etched below the bottom bracket see the photo below ).

  3. Prepare the letter containing all the information like frame number, colour,make, type etc addressed to the Custom Officer of the airport in duplicate and get it stamped.( This you will require when you come back.)
Finally we got into the aeroplane and relaxed. Landed in Colombo at 6 am in the morning and were received by the tour manager and proceeded to hotel. After check in and breakfast we started assembling the bikes.
Assembling the bikes is a great learning process. We did a great job and luckily we got the help of a local cycle shop dealer to do the fine tuning and we were ready to go.

Day 1 - Colombo - Hikkaduwa
सकाळी गणपती बाप्पा मोरयाच्या जयघोषात आम्ही सुरवात केली. आणि बघता बघता कोलंबोच्या  बाहेर पडलो .
The Galle road runs from Colombo to Galle which is the major National Highway (A2). The road surface was smooth and terrain was flat . We had decided to regroup after @ 25km or whenever we would see a coconut water stall. As soon as we were out of Colombo we were greeted by the Sea on our right almost throughout the ride. The weather was pleasant and every one was in a great mood.

Soon we reached Bansei by Beach Resort at Hikkiduwa. The resort was right on the edge of the sea.

We reached the hotel by 12 30 after covering a distance of 94 km and had good fish and some beer . Evening some of us went for sight seeing while  some of us headed for the sea and then in the pool.

Day 2 Hikkaduwa to Mirissa
We started at 6 30 in the morning as the distance today was only 52 km. The route again was along the sea side and very scenic and beautiful. Fortunately we got good cloud cover and it helped us a lot.
We passed over the famous Galle Cricket Stadium
As usual we took नाारळ पाणी on the way.

We reached Mirisa by 12 pm and the reached the resort. We stayed at Weligambay Mirissa . This place was amazing over looking the sea from the hill with a  vanishing edge swimming pool and a private beach.

We had a great time there and stayed up till late since the next day was a rest day.
We moved to Nuwara eliya by bus. We had to put the bikes in the tempo so we again removed the front wheels and packed them

The distance is @ 250 km. We reached Nuwara by evening and settled for a good dinner and rested well for the next day. En route we came across a big water fall and then a long climb.
The hotel at Nuwareliya was Heaven Seven which had an old colonial look and the manager there was very polite and resourceful. He took care of the bikes and allowed us to keep the bikes right in the reception.

Next day morning we started late after assembling the bikes and fine tune up and started by 10 30 to go to Kandy.
Day 4 Nuwaraeliya to Kandy
Nuwara to Kandy is long downhill of @ 45km with bends and curves and tea plantations all around. The weather was superb and slightly cold and we enjoyed the downhill and stopped at Macwood Tea Garden for a cup of tea and some refreshments

We reached kandy by 3 pm and checked in at Kandy City Hotel after doing almost 90 km that day.
In the evening we visited Temple of Tooth ( where Buddha's tooth is kept ) and had a good dinner at the hotel.
Day 5 Kandy to Sigriya
Kandy to dambula was a flat ride with last 12-13 km going up and down. We started at 6 30 in the morning and reached by 12 pm there.
The resort we check in was Saunters Paradise which is located on the outskirts of the reserved forest. There we saw the local Iguana, a type of lizard.

In the afternoon we visited the famous Sigriya Fort . The fort is on top of the huge rock mass where you have to climb more than 1000 steps. It was a great experience to climb after a hard ride of 90 km. The view from the top was awesome.

Day 6 Sigriya Jungle Road Ride
We set out on the road which leads to Trincomalee. We rode in that direction for @ 20km and returned back and we were delighted to see a family of wild elephants by the side of the road. We had a quick sight of them before they would get  irritated.
We returned back to the Hotel and started packing  the cycles.
By evening we were back to Negombo and then after a short rest proceeded  to  airport to return to India.
We had a great trip. All of us gelled very well and we had lots of fun.

The logistics by Snapstar Tours were excellent and the tour guides were courteous and helpful. I thank Mr. Tushar Mhetre and his staff for the support and booking of Airline, hotels etc.
Our friend Vinayak Apte sponsored the event jerseys.

The Srilankans are very polite and they observe strict traffic rules. In the entire travel of @ 550 km we came across only 4 speed breakers. The country is ready to welcome you with  open arms.

We are looking forward to a next trip soon..


OLD INDIAN Advertiisements

hese Old Indian Ads Were Made When You & I Probably Weren’t Even Born !!!!!!!



Indian advertising industry has evolved over the years along with our approach and mindset. The advertisements today show things which can convince this generation.

Likewise, old Indian advertisements had completely different tactics to hook their consumers. Some of these old advertisements by Old Indian Ads will surprise you, whereas some will make you nostalgic.

More Pictures of Old Indian Ads will follow in the next few days

1903: Taj Mahal Palace Hotel Inauguration

1903 taj opening

1920: Bradford Dyers England: Ganesha Picture

1920 ganesh england

1922: Godrej No 1 soap – Rabindranath Tagore

1922 godrej tagore

1928: Mysore Sandal Soap

1928 mysore sandal

1929: Pears Soap


1930: Mysore Sandal Soap

1930 mysore sandal

1930: Washable Condoms


1932: The Bombay Armoury

bombay armoury 1932 front

1935: Indian Tourism

1935 India Tourism

bombay armoury 1932 back