9911796707
TMI Blog1969 (12) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... e-feet and on the first floor 5,363 square-feet. The property comprised of among other parts of the building 41 shops. On the first floor 16 rooms have been with Jain Brotherhood for religious purposes. The Assistant Controller of Estate Duty, Amritsar, in his order of December 30, 1958, gives detailed description of the property and the quality of the material used and the quality of the construction of the building. So this building was constructed by the deceased in the year 1950-51. After the death of Jaswanti Devi, deceased, proceedings were started by the Assistant Controller of Estate Duty for payment of estate duty on the estate left by the deceased in the hands of her son. He filed a statement of account in regard to the estate of his deceased mother, and the only item which is a matter of controversy here in this reference is the valuation of the property named and styled as Shri Karam Chand Jain Market in Jullundur City Dina Nath in his statement of account value that property at Rs. 78,000, showing its annual rental at Rs. 18,000. At that annual rental the value of this building would be recovered in 4 1/2 years. He produced two letters from property dealers one fixin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affected the value of the property in Jullundur City, and (c) that the building in question is a big building, which is hardly any consideration because even a big building, if it comes to the question of its disposal, may be available for disposal in parts. The Assistant Controller of Estate Duty also found the method of assessing the actual cost of the building not satisfactory in relation to a given increase over the pre-war schedule of rates of the Public Works Department. These are apparently sound reasons on the basis of which it was open to the Assistant Controller of Estate Duty not to accept the valuation certificate of this chartered engineer. This officer then proceeded to value this property on the basis of rental method. He took the gross letting value of the property on the date of the death of the deceased at Rs. 18,836 and adding to it Rs. 160 per mensem as the gross letting value for the portion of the building in the occupation of the religious brotherhood, he arrived at its gross annual letting value as a whole at Rs. 20,756. Making allowances for repairs, municipal taxes, property tax, and collection charges, he arrived at the net annual letting value of this pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e yield there would be very much lower. The report of the valuer has, therefore, been rejected. " So even the Central Board of Revenue found the report of the approved valuer neither reliable nor acceptable as having exaggerated the matter of valuation very much to the advantage of the person accountable. Both the original authority and the appellate authority thus found the report of the approved valuer, after due consideration and on sound grounds, as not reliable and not acceptable as giving the correct market value of the property in question on the crucial date. This concurrent conclusion of the two authorities is based on due and proper consideration of the report of the approved valuer and going to the appraisal of this piece of evidence is not open to reconsideration in a reference of this type and it is not open to this court to reappraise evidence and to form its own opinion with regard to the same finding of fact by discarding the appraisal of the evidence by the authorities under Act 34 of 1953. The Central Board of Revenue then started with the gross rent of the property in question at Rs. 18,834 per annum and deducting " outgoings for municipal taxes, collection c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Central Board of Revenue being of the opinion that the matter of valuation decided by them was a question of fact dismissed the application of the person accountable on June 19, 1962. It was after that that the person accountable, Dina Nath, made an application to this court for mandamus directing the Central Board of Revenue to refer the question of law arising in the case according to him. His application was allowed and this court required the Central Board of Revenue to refer this question by its order of September 3, 1964. " Whether, on the facts and circumstances of the case, the Central Board of Direct Taxes was justified in law in fixing the valuation of the property at Rs. 2,25,000 ? " The Central Board of Direct Taxes (Central Board of Revenue) has accordingly made a reference of this question by its order of April 1, 1965. This is how this reference has come before this Bench. The facts have been stated in detail above and there is no controversy over them, as much appears also from the statement of case by the Board in its order of April 1, 1965. The controversy is with regard to the market value of Shri Karam Chand Jain Market in Jullundur City on the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he approved valuer. They had given sound reasons for finding the same not correct and unreliable. It was a case then in which there was no other material available for the matter of arriving at the market value of the property on the particular date, and, therefore, even the Board of Revenue was obliged to proceed on considerations of the net annual rental value and its capitalisation for 17 years on the formula to which reference has already been made to reach the market value after allowing the deductions referred to in their orders. The criticism of the learned counsel for the person accountable is that there was no evidence before the authorities that the cost of construction as worked out by the approved valuer was wrong and it was only his report which gave the cost of construction. So there was no basis for rejection of the same. As that report or certificate could not be rejected, so the authorities were in law not at all justified in proceeding, in the face of that evidence, to arrive at the market value of the property according to the formula of capitalising the net rental value over a certain number of years. In this respect the learned counsel has relied upon Kanagasab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not been allowed. It is first said that the adjustment for reversion of land value has not been done in a proper manner, but it is not quite clearly explained what is the error in the approach of the Central Board of Revenue in this respect. This matter is also dealt with in Parks' book, at pages 256 and 424. On the last-mentioned page a table of valuation is given in relation to percentages and years over present valuation of one rupee. The formula for working out the same is given at page 256 and it is this formula along with the table at page 422 in the column of 3 per cent. in relation to the period of 50 years that the Board has taken into consideration. Nothing has been said beyond this that the approach of the Board is not correct in this respect. The other objection as to deductions is that while on the gross annual rental the Assistant Controller of Estate Duty allowed repairs at 1/6th of the same, the Central Board of Revenue has in its order allowed it only at 1/12th. It is urged by the learned counsel for the person accountable that there is no reason why the criterion laid down in the Indian Income-tax Act of allowing repairs at the rate of 1/6th of the annual rent ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
