9911796707
TMI Blog1984 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... he common question referred is: " Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that a deduction of 10% has to be allowed on the property owned by the co-owners even when the valuation is made on rental capitalisation method ? The facts lie in a narrow compass: The assessee is one of the co-owners of a property consisting of a shop buildi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The question is, whether such allowance or deduction at the rate of 10% is justified even when the valuation is determined by adopting the rental capitalisation method. Mr. Srinivasan, learned counsel for the Department, urged that when once the rent is ascertained and a proper multiple is employed, the fair market value determined thereon, for the purpose of section 7, cannot further be reduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fetch if sold in the open market on the valuation date. The valuation by rental capitalisation method depends upon the rent actually paid in respect of the premises occupied by tenants or on the rental value of the self-occupied buildings. After so ascertaining the annual rental value, it has to be capitalised by an appropriate multiplier. This has been generally accepted as the correct method of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchaser if it is gold in the open market. In Lalita Jabbar v. Competent Authority [1982] 133 ITR 389, 396, the Calcutta High Court observed that an undivided half share of the property purchased would not and could not be half of the value of the entire property if sold in the open market. A purchaser of an undivided share of property cannot also enjoy the property in the same way as the full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o allow for this factor, a deduction of say 10 per cent. is often made from the estimated value of the share. " Since there are difficulties inherent in the enjoyment of an undivided share in a property purchased in the open market, courts and text-book writers have permitted allowance or deduction of at least 10 per cent. from the estimated value of the share. This is an universally accepted pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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