1989 (11) TMI 91 - AT - Income Tax

Summary

Issues:
1. Disclosure of accumulated rent in court by the assessee for assessment years 1975-76, 1980-81, and 1981-82.
2. Valuation of accumulated rent in court.
3. Computation of the value of the tenanted property.
4. Claim of dower debt by the assessee.
5. Valuation of property at 58, Janpath Gali Batashan, Noor Building, Sultan Buildings.
6. Multiplier and valuation of accumulated rent for assessment year 1980-81.
7. Valuation of property and rejection of dower debt for assessment year 1980-81.
8. Deduction of dower debt and valuation of property for assessment year 1981-82.
9. Multiplier and valuation of accumulated rent for assessment year 1981-82.

Issue 1: Disclosure of accumulated rent in court
The appeals involved common issues concerning the disclosure of accumulated rent in court by the assessee for the mentioned assessment years. The assessee failed to disclose the rent in their returns or during assessment proceedings. The Tribunal found that the lower authorities' actions were justified as the assessee did not mention the accumulated rents in any form during the filing of returns for the relevant years.

Issue 2: Valuation of accumulated rent in court
The Tribunal directed the valuation of accumulated rent in court at 50% of its value as done for a previous year, considering the rent as disputed. The assessee's lack of knowledge about the valuation did not affect the decision, and the valuation was adjusted accordingly.

Issue 3: Computation of the value of tenanted property
Regarding the computation of the value of the tenanted property, the Tribunal upheld the rent capitalization method adopted by the CIT(A) for the tenanted property. The Tribunal directed the adoption of a multiplier of 12 for the relevant year, considering the property's circumstances.

Issue 4: Claim of dower debt
The Tribunal restored the matter of the assessee's claim of dower debt back to the WTO for further examination after considering the affidavits provided by the assessee. The Tribunal emphasized the need for a thorough examination of all deponents regarding the existence of the dower debt.

Issue 5: Valuation of property at 58, Janpath Gali Batashan, Noor Building, Sultan Buildings
The Tribunal confirmed the valuation of the property at 58, Janpath Gali Batashan, Noor Building, Sultan Buildings as per Rule 1BB, considering the property as tenanted and residential, in line with the CIT(A)'s decision.

Issue 6: Multiplier and valuation of accumulated rent for assessment year 1980-81
For assessment year 1980-81, the Tribunal directed the application of a multiplier of 11% and the valuation of accumulated rent at 70% due to changed economic conditions, higher bank deposits return, and the period between data recovery and the relevant assessment year.

Issue 7: Valuation of property and rejection of dower debt for assessment year 1980-81
The Tribunal confirmed the CIT(A)'s decision regarding the valuation of the property and rejected the Revenue's claim against the rent capitalization method. The issue of the dower debt was restored back to the WTO for reassessment.

Issue 8: Deduction of dower debt and valuation of property for assessment year 1981-82
Similar to the previous year, the Tribunal restored the issue of the dower debt back to the WTO for reassessment. The valuation of the Marina Hotel building was confirmed as per the rent capitalization method.

Issue 9: Multiplier and valuation of accumulated rent for assessment year 1981-82
For assessment year 1981-82, the Tribunal directed the adoption of a multiplier of 11% and the valuation of accumulated rent at 80%.

In conclusion, the Tribunal partly allowed the assessee's appeal for the year 1975-76 and partly allowed the appeals for the years 1980-81 and 1981-82. The Revenue's appeal for the year 1975-76 was dismissed, while those for the years 1980-81 and 1981-82 were partly allowed for statistical purposes.