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TMI Blog1981 (2) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer for valuing the property on the valuation dates relevant to the asst. yrs. 1969-70 to 1975-76. The District Valuation Officer in his report dt. 13th December, 1976 valued the property at Rs. 20,50,600 as on 21st October, 1968, at 22,02,800 as on 9th November, 1969, 30th November, 1970, 19th October, 1971, 6th October, 1972, 26th October, 1973 and 13th November, 1974 being the relevant valuation dates for the asst. yrs. 1969-70 to 1975-76 respectively. The WTO adopted these valuations and made the assessment accordingly. 3. The theatre situated on the land admeasuring 37355 sq. feet was acquired in an open land auction by Shri Harkishandas Mehta, the husband of Bai Nani in 1926. The land and the theatre were let out to a single i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to Hotal Utsav on the west of the theatre building was determined by the District Valuation Officer at Rs. 2,39,435 and the value of Navrang Cinema was determined at Rs. 19,63,358. The value of the entire property was determined at Rs. 22,02,800. 6. In the view of the CIT(A) the valuation of Navrang Cinema should be made on land and building method basis instead of on the basis of capitalisation of the yield. The Commr. took the view that the entire property was within the complete control and ownership of one single HUF. The Commr. observed that the partners of M/s Navrang Cinema were the members of the assessee HUF and that rent of the theatre was fixed by mutual agreement. It was further observed that it was mutually agreed that a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee that the rate of capitalisation should be taken at 12% in respect of the leasehold property in view of the decision of the Gujarat High Court in the case of CIT vs. Vimlaben Bhagwandas Patel reported at (1979) 13 CTR (Guj) 27 : (1979) 118 ITR 134 (Guj). The Commr. accepted the rate of 5% adopted by the District Valuation Officer as reasonable. The Commr. directed that the valuation of the property for all the years be made as per the figures given in para 8 of his order. 9. Shri J.P. Shah, the ld. Advocate for the assessee, submitted that in view of the provisions of the Bombay Rents Hotel and Lodging House Rents (Control) Act, 1947, the standard rent could not exceed the rent on first letting and that this standard rent alone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alisation would be 8-1/3 times the net average annual income which would give the yield of 12% per annum on the investment of capital the property. 10. Shri Harne, the ld. authorised representative for the department, strongly relied on the reasons given by the CWT(A) in para 5 of his order of preferring the land and building method to the method of capitalisation of the yield. In our view, however, simply because of the inter-relations between the assessee, the partners of the firm and the shareholders and directors of the limited company and simply because the rent of the theatre was fixed by mutual agreement it cannot be said that low rent of that theatre was fixed. As a result of the firm agreeing to the substantial portion of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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