9911796707
TMI Blog1979 (9) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... s respectively. A building was constructed on 7/1A, Lower Circular Road, consisting of partly one storey, partly three stories and partly four stories with servant quarters. The entire building was let out to various tenants and the annual rental income was Rs. 55,656. The property at 7/1B, Lower Circular Road remained a vacant plot of land. On 8th Nov., 1973, the assessee sold both the properties at 7/1A and 7/B, Lower Circular Road to Kaushalya Rani Charity Trust for a total consideration of Rs. 14,45,000. In order to work out the capital gains, the assessee exercised its option to adopt the fair market value of the properties in question as on 1st Jan., 1954 as the cost of acquisition. Relying on the valuation report of its valuer Sri B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise generally, Residential house property according to the circumstances and particulars of each case will vary from 5 to 7 1/2 per cent security and the years purchase will vary between 13 to 20..... security of shops and business premises will generally vary between 6 8 per cent and the years purchase between 12 16....... If you applied the method as stated by the High Court in the light of its decision, it would be worked out as under: The Security rate is taken @6 per cent and the value of the property would be Rs. 5,78,450 (i.e. 16.6 times off rental value) gross rental on 1st Jan., 1954 as per assessee's statement . . Rs. 55,656 Less: Municipal tax mentioned in the valuers report ..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proved valuer Sri Benoy Dalmia. The difference in two valuations is due to amount of deduction on account of (i) repairs, (ii) insurance and collection charges as well as difference in the rate per cottah adopted by the parties for the vacant plot of land. We shall now deal with these points. 5. The assessee's valuer had deducted 5 per cent of the gross rental income for repairs while the ITO has deducted 1/6th of the gross rental income for this purpose. Relying on the order of the Tribunal, Bombay Bench 'C' in WTA Nos. 452 to 458 (Bom) of 1976-77 dt. 22nd July, 1977, the learned representative for the assessee submitted that deduction of 1/6th of the gross total income for repairs was excessive. He further submitted that the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment with the said decision of the Tribunal. We, therefore, direct the ITO to deduct 5 per cent of the gross rental income for collection charges. 9. As regards the vacant plot of land at 7/1B, Lower Circular Road, the learned representative for the assessee submitted that the I.T. authorities should have accepted the valuation made by the assessee's valuer on the basis of Rs.16,000per cottah. In this connection, he relied on the decision in the case of Pingle Venkatarama Reddy(2). As regards the instance sale at 25A, Theatre Road relied on by the ITO, the learned representative for the assessee submitted that the same was not comparable with the property with which we are concerned in the present appeal. That property is located on Thea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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