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TMI Blog1996 (3) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... plicability of provisions of s. 40 of the Finance Act, 1983 itself. 2. We have heard the learned Departmental Representative as well as assessee's counsel. The facts of the case are that the assessee owned a building commonly known as Hotel Ambassador building and had given it on rent to its subsidiary company styled as M/s. Narang Hotel (P) Ltd. which was using the building for carrying on business of hotel. The assessee had not filed any return of wealth as required under s. 14 of the WT Act but in response to notice under s. 17 for both these years issued on 30th Sept., 1987 and served upon by the assessee on 1st Oct., 1987, the assessee filed returns of wealth declaring total wealth of Rs. 2,42,000 and in both these years the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 982) 26 CTR (Cal) 310 : (1982) 137 ITR 483 (Cal) and CWT vs. Ramsaran Kajriwal (1987) 64 CTR (All) 32 : (1987) 168 ITR 485 (All), held that the property being on rent and governed by the Bombay Rent Control Act, the provisions of r. 1BB were not applicable. The CIT(A) further held that the value of the property should be re- computed by applying the rent capitalisation method and while doing so, the multiplier as suggested in r. 1BB should be taken because the multiplier will normally be a good guide. Before us, both the Revenue as well as the assessee are in appeal. WTA Nos. 624 625/Bom/1991 3. Both these appeals are by the Revenue and the main grievance is that CIT(A) was not justified in directing the AO to value the property b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value could not be determined by applying r. 1BB and, therefore, we are of the opinion that valuation report of the Valuation Officer which, as admitted by the Valuation Officer himself before us was arrived at by applying the provisions of r. 1BB could not be taken into evidence and hence was not a binding evidence on the AO. 5. Having held so, the next question for us is as to what method should have been adopted for valuing this tenanted property which was governed by the provisions of Bombay Rent Control Act. After considering the submissions, we are inclined to agree with the submissions of assessee's counsel that the method for valuation of the property in question could be rent capitalisation method and this view finds support fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases: 1. CWT vs. Ashwini Kumar Gordhanbhai Patel in SLP (Civil) No. 2364 of 1985 (1992) 193 ITR (St.) 2. "Valuation of house property let out to company whose shareholders were close relatives of assessee.—19th Nov., 1991: Their Lordships Ranganath Misra, C.J.I. and Kuldip Singh and A.S. Anand, JJ. dismissed the Department's special leave petition to appeal against the order, dt. 14th Sept., 1984 of the Gujarat High Court in WTA No. 34 of 1984 whereby the High Court declined to call for a statement of case on whether the AAC had rightly allowed the assessee's appeal and directed calculation of the annual value of a warehouse by adopting the rental method instead of the market value method adopted by the WTO. In this case the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multiple of 10": The resultant view after considering the aforesaid decisions remains that the valuation of property in question can be arrived at only on the basis of rent capitalisation method considering the higher of the three amounts—(i) or (ii) or (iii) as the annual letting value. 7. From the submissions of the parties and the facts on records, we have noticed that in assessee's income-tax case, the income from this house property has been assessed on the basis of actual rent received by the assessee, which was Rs. 1,38,000 and the Municipal Corporation's valuation was Rs. 1,37,654. In view of these facts, it is noticed that the actual rent received by the assessee was higher and, therefore, the value of the property should be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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