1985 (8) TMI 19 - HC - Income Tax

Summary

Issues:
1. Assessment of house-tax under the Punjab Municipal Corporation Act, 1976.
2. Determination of rateable value based on Rent Control Legislation.
3. Interpretation of Supreme Court judgments and their application in the present case.
4. Reassessment of house-tax by the Commissioner.

Analysis:
The judgment by Judge I. S. Tiwana pertains to two petitions concerning adjacent properties assessed for house-tax under the Punjab Municipal Corporation Act, 1976. The petitioner objected to a proposed increase in the rateable value of the property from Rs. 1,600 to Rs. 12,000 per annum, citing the applicability of the East Punjab Urban Rent Restriction Act, 1949. Despite a reduction to Rs. 7,920, the objection was rejected. The court referred to the Supreme Court's ruling in Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee, emphasizing that under Rent Control Legislation, the annual value cannot exceed the standard rent. The authorities' argument that the property was never rented out was dismissed, as the standard rent must be determined based on hypothetical tenancy. The court highlighted that a prior judgment of the court was overruled by a later Division Bench decision in Punjab Contrast Steels Limited v. Municipal Corporation Ludhiana, aligning with the Supreme Court's stance. Consequently, the court allowed the petition, directing reassessment of house-tax in compliance with the law and awarded costs of Rs. 250 in each case to the petitioners.