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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 ..... wal for the Petitioner. Shri Anoop Sharma and shri Manu K. Giri for the Respondent. ORDER Sanjiv Khanna, J. - The present appeal under Section 27A of the Wealth Tax Act, 1957 (Act, for short) relating to assessment years 1985-86, 1986-87 and 1987-88 has been preferred by the Revenue in the case of MG Builders and Co. Pvt. Ltd., respondent herein. 2. By the order dated 15.5.2000 the following substantial question of law was framed : "Whether on the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 19.11.1998 has agreed with the findings recorded by the Commissioner of Wealth Tax (Appeals). 8. We need not examine the legal aspects and provisions of the Act as the matter is covered by the decision of the Supreme Court in CWT v. Sharvan Kumar Swarup Sons [1994] 210 ITR 886 and decision of this Court in Brig. Gurbux Singh v. CWT [1998] 230 ITR 166 (Delhi) 9. In Sharvan Kumar Swarup Sons (supra) it has been held that Rule 1BB is retrospective in nature 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t maintainable rent" for the purpose of multiplying the same with a fixed fraction to arrive at the value of the house, means the amount of "gross maintainable rent", minus certain deductions like a sum equal to 1/6th in respect of repairs and an amount spent during the previous year for collection of the rent not exceeding six per cent., etc. Rule 1BB only sets out the method or formula for determining the market value of a particular asset and it is now settled that it is 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 rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 1BB, which rule, in so far as those deductions are concerned, in substance, is identical to section 24 of the Income-tax Act." 11. In Schedule III, Rule 5 it is stated that where an owner has accepted an amount or deposit, not being an advance payment towards rent for a period of 3 months or less, an amount calculated at the rate of 15% per annum on the amount of deposit outstanding from month to month shall be added to compute the annual rent. Thus interest on security deposited of Rs. 31.50 lacs could be added to compute the annual rent. 12. In view of the aforesaid position, the question of law mentioned above is answered in negative i.e. in favour of the appellant-Revenue and against the respondent-assessee. The computation an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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