9911796707
TMI Blog1986 (4) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out by adopting yield method. The dispute primarily centres round: (i) Computation of the annual letting value, and (ii) number of year's purchase of the said annual letting value to be adopted for the purpose of capitalising the yield. 3. The dispute regarding the determination of the ALV is with regard to two points only, namely, whether 1/6th of the rent should be deducted for repairs or it should be 1/10th of the rent. The Valuation Officer has allowed 10 per cent deduction for repairs on the ground that the provisions of the IT Act were not necessarily applicable while determining the ALV for purposes of Wealth-tax. About collection charges, there was similar dispute. The assessee claimed 6 per cent of the rent as collection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim with regard to the aforesaid allowance at the rates allowed by the ld. CIT(A). On behalf of the assessee, ld. counsel submitted that the allowance in question could not vary from year to year and that, therefore, they had to be an estimated figure which would enure from year to year on an average basis and the figure adopted by the ld. CIT(A) in this connection were not unrealistic. 6. We have given careful consideration to the facts of the case and the rival submission. It is true that what would be the question of deduction for repairs and for collection charges was to depend on the facts of each case and, there can be no uniform formula for the same as is the position while determining the income from property under s. 24 of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent of the rent received by the assessee cannot be said to be an underestimate taking into account the fact that estimate taking into account the fact that ONGC is the tenant of the assessee and nothing has been shown to us to prove that the assessee had to spend some amount for getting cheques from them. To presume that ONGC would be slow in giving their cheques to the assessee would be a presumption without any basis. The cheques, etc. might be getting cleared and expenses in regard thereto might be incurred. Occasionally somebody might be visiting the ONGC office in connection with the lease. An overall expenditure of 2 per cent which works out to more than Rs. 2,000 per annum cannot be said to be on the lower side. The ld. CWT(A) was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as done by the CWT(A) in his order. What affected his thinking may be noted in his own words as follows: "On the second important question viz. the question of multiplication factor, I agree that the investment in property cannot be compared with the investment in gilt edged securities. It is an agreed position that the investment in commercial properties is expected to bring a higher rate of interest than even the interest on long terms deposit because the investment in properties carried a higher risk factor. Considering the rate of return on long term deposits in the years involved in the present appeal it would be reasonable to keep the multiplication factor at 8 times the net annual value in asst. yrs. 1976-77 and 1977-78. This would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erted w.e.f.1st April, 1979and, therefore, takes into account the exception of yield from commercial properties prevailing in and about the said period i.e. 1979-80. In our opinion, therefore, it would be more realistic in the absence of any evidence to the contrary, to adopt 9 per cent rate of expected yield and, therefore, to adopt 100/9 as the capitalisation factor. Accordingly, the order of the CWT(A) stands modified.
9. In the result, the Departmental appeals stand partly allowed.
Cross objection
10. Through the cross objections, the assessee's ld. counsel has covered more or less the same grounds as has been covered by the arguments and facts mentioned above. The cross objections of the assessee, therefore, stand rejected. X X X X Extracts X X X X X X X X Extracts X X X X
|
