1987 (8) TMI 83 - SC - Income Tax

Clarification of the judgment Dr. Balbir Singh v. Municipal Corporation, Delhi 1984 (12) TMI 64 - SUPREME Court Held that - When at a different stage, additional construction was raised on the property already valued, the market value of the land was not to be taken into account as it had already been considered while fixing the valuation of the pre-existing construction. The Corporation did not challenge the correctness of the decision but only wanted clarification. Since the matter has been directly decided and there is absolutely no ambiguity, an application of this type on behalf of the Corporation does not lie. We were told by Mr. Salve, learned counsel for Common Cause, that their application had emanated when the Corporation wanted to act contrary to the judgment of this court in regard to this category of constructions. Later on, the Corporation wanted the cover of a clarificatory order of this court for the procedure adopted by it for reflecting the market value of the land more than once in situations appertaining to this category. On our finding that this court has categorically decided that the market value of land is not to be added over again, there is no ambiguity which requires clarification. We decline to make any clarificatory order as there is no necessity. Petitions dismissed.

Summary

Issues:
- Determination of "rateable value" under the Delhi Municipal Corporation Act of 1957 for properties constructed in stages.
- Clarification on the valuation of land in relation to subsequently constructed additional structures.

Analysis:
The Supreme Court, in a three-judge Bench decision, examined the provisions of the Delhi Municipal Corporation Act of 1957 to determine the "rateable value" for property tax assessment. The properties were classified into four categories, with the fourth category involving premises constructed in stages. The court laid down guidelines for assessing the rateable value in such cases, emphasizing the determination of rent based on standard rent and various factors. When additions are made at subsequent stages, the court outlined three scenarios and the corresponding methods for assessing rateable value. The court clarified that the standard rent determination cannot be based solely on the cost of construction and land price.

Regarding a specific application for clarification on the valuation of land concerning subsequently constructed additional structures, the court directed fresh assessments according to the established law. Arguments were presented by the Municipal Corporation, Common Cause, and the Government Servants Co-operative House Building Society. The court reiterated its previous decision that the market value of land should not be added twice over when valuing additional structures. The Corporation sought clarification, but the court found no ambiguity in its previous ruling and dismissed the application, stating that no clarificatory order was necessary.

In conclusion, the court dismissed all civil miscellaneous petitions related to the clarification sought by the Corporation, emphasizing that the market value of land should not be added again when valuing subsequently constructed additional structures. The court upheld its previous decision and declined to issue a clarificatory order due to the absence of ambiguity.