9911796707
TMI Blog1983 (1) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ve assessment years. The decisions in the assessee's appeals will also govern the disposal of the other five appeals in the case of Shri Nathu Ram Ahuja (deceased). 2. The assessee along with his father and his brother was co-owner of a theatre by name Deenar Theatre situated in Hanumangarh, a place in Rajasthan. He and the late Shri Nathu Ram Ahuja owned one-third share each in the theatre on all the five valuation dates. The valuation of this one-third share is the only contention, raised by the assessee for the five years under appeal. The assessee on the basis of approved valuer's report, which was based on land and building method, returned the value of his one-third share as under but the WTO referred the matter to the Valuation Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly lease rent payable to the three co-owners was Rs. 40,500 and not Rs. 36,000 for the assessment year 1970-71 and Rs. 40,000 for the assessment year 1971-72 as stated by the Valuation Officer in his report. 4. We have heard the rival submissions about the validity of the approach of the Valuation Officer in the matter of valuing the cinema property. The Valuation Officer valued the property on profit capitalisation method even when the property so far as the assessee was concerned was leased on rent. In the annexure to his report, the Valuation Officer has considered the figures of gross income, expenditure and net income received from the running of cinema and on the basis of that net income, he worked out the value of the property on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 40,500 per year. 5. Before dealing with the approach of the Valuation Officer in para 6.6, we may straightaway note that it was not in dispute that so far as the Valuation Officer was concerned, he proceeded to value the cinema property totally disregarding the lease agreement and on the footing that the property and its income by running the cinema, in fact, belonged to the three co-owners, in other words, for him the fact that the three co-owners had leased the property to a partnership firm, no doubt, of their relatives, carried no weight. In our opinion, such an approach of the Valuation Officer is not in accordance with law and, therefore, his report is prepared on an altogether wrong basis. Reference to a Valuation Officer is ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to proceed in our view to value the asset, which was a leased out property and had no jurisdiction to hold that the lease was sham and to proceed to value the property as if it was in the occupation of the co-owners themselves for the purpose of running the cinema business. In our view, the Valuation Officer had no authority to imagine a situation different from what was exhibited by the assessee on his own version and which alone had been referred by the WTO to him. It was not open for him to observe as he did at 6.6(1) that "The property in shown as leased out by the assessee to their own family members or themselves through a partnership firm, as a matter of business convenience." He was in law concerned only with the yield from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty. However, before rejecting the assessee's version about the rental income it will be for the Valuation Officer to find out the rental income if the property were to be let out at Hanumangarh without any concessional element, in other words, it has to be established first by proper evidence and material that the rent charged by the assessee and the other two co-owners was low and concessional and the market rent was higher. 8. In view of the above discussion, we are unable to sustain the combined order of the AAC and the orders of the WTO on this point and consequently, vacate the findings of both the authorities and restore the issue to the WTO for fresh disposal in accordance with law for all the five assessment years after hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
