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TMI Blog2011 (11) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and in the circumstances of this case was the Tribunal right in coming to the conclusion that the annual letting value of the property in question should be fixed @ Rs. 3.50 per sq. ft." 3. The respondent-assessee is owner of property No. 4, Community Centre, New Friends Colony, New Delhi (property, for short), which during the relevant period was let out to M/s Godfrey Phillips Pvt. Ltd. on annual rent of Rs. 4,42,260/-. The tenant had also deposited interest-free security of Rs. 31.50 lakhs with the assessee. 4. In the wealth tax return, the respondent-assessee had estimated a fair market value of the property on the basis of annual rent and had claimed deduction of Rs. 31.50 lakhs against the value of the property. The Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and will apply to all pending proceedings including appeal/reference proceedings. Method of capitalization of income on number of years' purchase value was one of the recognized methods for valuing a house. The Rule was intended to impart uniformity in valuation and to avoid vagaries and disparities. The Rule 1BB stipulates and requires addition by way of notional interest on security deposit paid by a tenant to a landlord, when conditions stipulated were satisfied. 10. Rule 1BB has been replaced and valuations of immovable assets including commercial property is now mandated by Schedule III to the Act. Referring to the said Schedule, Section 7 of the Act and the ratio of the decision in the case of Sharvan Kumar Swarup & Sons (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procedural and not substantive in nature. (CWT v. Sharvan Kumar Swarup and Sons [1994] 210 ITR 886 (SC)). It is intended to carry out the purpose and object of section 7(1) of the Act, namely, an estimate of the price of the asset "if sold in the open market". Though rule 1BB was applicable for determining the value of a house which was wholly or mainly used for residential purposes, being procedural in nature, it could be applied even for valuing other let out properties as well, which has now been done in the newly inserted Schedule III to the Act. Since section 7(1) itself opens with the words "subject to any rules made in this behalf" and rule 1BB having been framed though subsequently, (on lines similar to section 24 of the Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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