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TMI Blog1984 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ror on lease to Radhey Mohan at a monthly rent of Rs. 480 on April 1, 1970. The first floor of the building was in occupation of the transferor himself. He filed a suit for ejectment against the tenant on December 17, 1972, and obtained a decree on September 5, 1973, on the basis of a compromise. On September 4, 1973, the transferor agreed to sell one-fourth share of the property to Radhey Mohan, tenant (hereinafter called " the transferee "), for a consideration of Rs. 27,500. Three more agreements to sell were entered into by the transferor subsequently, two with Brij Mohan, transferee, and one with Radhey Mohan, transferee, for one-fourth share each. Brij Mohan is the brother of Radhey Mohan. In pursuance of the agreement, the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity, four by the transferor and two each by the transferees. The Tribunal held that the most appropriate method to determine the value of the property was the rent capitalisation method and applying that principle, its value came to Rs. 1,08,000 only. Consequently, it accepted the appeals and reversed the judgment of the Competent Authority. The Commissioner of Income-tax has come up in appeal to this court. It is contended by Mr. Ashok Bhan that the order of ejectment had been passed by the civil court against Radhey Mohan, tenant, before the execution of the sale deed regarding the ground floor and that the first floor was in occupation of the transferor lie further submits that the provisions of the East Punjab Urban Rent Restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of the land with buildings, especially those used for business purposes, is the method of capitalisation of return actually received or which might reasonably be received from the land and the buildings. " The above principle can, in our view, be made applicable in determining the fair market price under the I.T. Act. In this view, we are fortified by the observations of this court in CIT v. Prem Nath Anand [1977] 108 ITR 549. Similar view was taken in Wenger and Co. v. District Valuation Officer [1978] 115 ITR 648 (Delhi), CIT v. Smt. Vimlaben Bhagwandas Patel [1979] 118 ITR 134 (Guj), Product Kumar Dutta v. Competent Authority IAC [1982] 134 ITR, 42 (Cal) and CIT v. Asharfi Lal Gupta [1983] 142 ITR 765 (All). The fact that a part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, in all such cases, the annual value of the building for purposes of house tax was limited to the measure of the standard rent determinable on the principles laid down in the Rent Control Act and it could not exceed such measure of standard rent. It is evident from the above observations that for determining the annual value of the property whether it is occupied by a tenant or by the landlord, the principle applicable is as to what rent the landlord is entitled to charge from the tenant. Similarly, for finding out the fair market value of the property in the possession of an owner himself, its hypothetical rent, taking into consideration the rents prevailing in the locality, can be determined. The other contention of Mr. Ashok Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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