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TMI Blog1983 (5) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... alue shown by him, i.e., Rs. 1,40,000 is 171 times net income which is much more than multiple mentioned in the case of CIT v. Smt. Vimlaben Bhagwandas Patel [1979] 118 ITR 134 (Guj.), i.e., 8 1/3 times. Therefore, this value should be accepted. According to him the value taken by the WTO comes to 24 times the net income which is very high and unjustified. He has also relied upon the following authorities : (1) Jaswant Rai v. CWT [1977] 107 ITR 477 (Punj. Har.). In this case relying on the Supreme Court judgment in the case of State of Kerala v. P.P. Hassan Koya AIR 1968 SC 1201, their Lordships have approved the method of capitalisation of return actually received from building. It is also held that the method which is beneficial and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al's decision in WT Appeal Nos. 309 to 311 (Indore) of 1981 a copy of which he has supplied to us. 5. There is no dispute in this case that the yield method has been applied by both the sides and that is the right method to be applied in the case of the property in question because it is rented property. Therefore, the dispute is on two points : (i) whether the reversionary value has to be taken into account or not, and (ii) how much deduction has to be allowed from the gross rented income on account of expenses. 6. In the two decisions of the Calcutta High Court, i.e., CIT v. Smt. Ashima Sinha [1979] 116 ITR 26 and CIT v. Anup Kumar Kapoor [1980] 125 ITR 684, the High Court has in no uncertain terms stated that the reversionary value s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he judgment there is no discussion regarding this point. However, in both the cases, the judgments show that the method of valuation takes into consideration the limited period for which the tenancy exists. There are calculations in the former case at page 29 and in the latter case at page 688 of the reports. They clearly show that the value is taken into account on a yield method only for the limited period of the tenancy and to that the value on the basis of possibility of the land becoming available in a vacant condition is added. Therefore, although there is no discussion in the above judgments regarding the perpetuity factor being ruled out in the above method of valuation, the calculations recorded as above in the judgments show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into account nor is there any reference to the aforesaid two decisions of the Calcutta High Court. 9. To a question put to the learned departmental representative from the Bench, how the reversionary value could be taken into account in view of the difficulty of getting the tenants to vacate the land the learned departmental representative replied that when the life of the building was over, the tenants were bound to vacate it and could not stay on. The assessee's representative at once pointed out that even when a new structure was built up on the same land the old tenants had to be given equivalent accommodation and to that again the learned departmental representative replied that the old tenants had to be given accommodation on a ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or even in a dilapidated condition. All these are uncertainties. Therefore, in the light of the aforesaid two decisions of the Calcutta High Court and the aforesaid further consideration, the balance of reasoning is in favour of the view that the reversionary value should not be taken into account for the purpose of valuation in such a case. 11. Regarding the deductions for the expenses the learned counsel for the assessee has relied upon the decision in the case of Smt. Vimlaben and submitted that 40 per cent of the gross income should be allowed as deduction. The Valuation Officer has allowed 4 per cent on account of collection charges. In Smt. Vimlaben's case, the Court was concerned with the rough method as provided in Schedule II t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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