Valuation of house property at 129A , S. P. Mukherjee Road, Calcutta, i s subject-matter of common dispute in all four appeals filed by Revenue against orders of AAC. assessee purchased plot of land at 129A, S. P. Mukherjee Road, Calcutta, in 1968 for consideration of Rs. 98,000. Thereafter, she got plan sanctioned for construction of 7-storeyed building on aforesaid land. assessee, however, constructed building upto third floor. In present appeals we are concerned with asst. yrs. 1973-74, 1974-75, 1975-76 and 1976-77. For asst. yrs. 1973-74 and 1974-75 construction of ground floor, first floor and 2nd floor we completed and tenanted. However, third floor was under construction During asst. yrs. 1975-76 and 1976-77 construction of third floor was completed and same was being occupied by assessee herself for own residence. value declared by assessee for each of four assessment years under appeal was considered to be low by WTO. He, therefore, referred matter of valuation to Departmental Valuation Officer, who determined value of property at Rs. 10,44,000. Accordingly, WTO completed assessments of four years under appeal, taking value at Rs. 10,44,000. assessee appealed to AAC and contended that WTO was not justified in estimating value of property at Rs. 10.44 lakhs for each of four years ignoring fact that ground, first and second floors of building were tenanted and that third floor was occupied by assessee herself for own residence. It was urged that when property was tenanted, rental method was to be adopted. It was further urged that DVO, while applying rental method, had taken into consideration reversionary value of land separately which he should not have done keeping in view principle laid down by Calcutta High Court in case of CIT vs. Smt. Ashima Sinha (1979) 116 ITR 26 (Cal) and J. N. Bose vs. CWT (1976) 104 ITR 83 (Cal). It was also urged that on consideration of facts and circumstances of case, DVO should not have applied multiplying factor of 12.5. It was contended that portion of building which was occupied by assessee for her residence was also to be valued on proportionate rental method in view of decision of Supreme Court in case of Dewan Daulat Rai Kapoor vs. New Delhi Municipal Committee (1980) 122 ITR 700 (SC). AAC after considering submissions made before him as also going through facts of case, inter alia, held as under: "I have carefully considered submission made on behalf of appellant and find that there is considerable force in it. building is meant for commercial and residential purposes. ground floor, first floor and second floor were in occupation of tenant on relevant dates. Third floor is meant for residential use was not till then constructed. building has been fully let out to tenant at very fancy rent. I do not agree with valuation officer in his adding imaginary figure on basis of reversionary method. In method adopted by valuation officer value of land has taken twice, being included in amount arrived at by yield or rental method or again under reversionary method. As has been held by his Lordship Calcutta High Court and referred to by Mr. Sinha in case of CIT vs. Smt. Ashima Sinha this is entirely novel approach and is erroneous. As to multiple factor of 12.5 applied by valuation officer I find that appellant has been able to earn let return of 12.5 to 15 per cent on investment in construction of building as determined by ITO in course of assessment for asst. yr. 1971- 72. Under r. 1BB of WT Rules referred for valuation of property used for purpose other than residence, multiple factor is 100/9. Calcutta Tribunal in number of cases has adopted multiple factor of 10. Having regard to facts of this case actual investment by appellant and construction of building and rent realised by him, I hold that multiple factor of 10 will be reasonable in determining value of this property." Against said order of AAC, Revenue has preferred present appeals before Tribunal and it was contended by ld. Departmental Representative that AAC was wrong in not considering value of house property in question as determined by DVO. He took us through DVO's report and urged that DVO has taken into consideration entire factual aspect of matter. He pointed out that plan was sanctioned by Municipal Authority for construction of 7- storeyed building by assessee and that assessee gifted roof of third floor and donee also had and that assessee gifted roof of third floor and donee also had constructed structures thereon. ld. Departmental Representative vehemently urged that there was some potentialities for construction of building above third floor which AAC failed to consider. He also urged that DVO has rightly included proportionate value of rent while determining value of property in question. He also urged that even AAC, while estimating value of house property on rental method, would not have applied multiplying factor of 10 ignoring provisions of r. 1BB of WT Rules. In short, ld. Departmental Representative contended that AAC failed to consider various aspects of matter while value of property for each of assessment years under appeal. Ld. Counsel for assessee, on other hand, supporting orders of AAC contended that there was no dispute about fact that ground, first and 2nd floors of building were tenanted. Hence, rental method was best method for valuation of this portion of building. He also urged that on consideration of present bank rate of interest multiplying factor of 10, as applied by AAC, was quite reasonable. He submitted that while determining value of particular property on rental method, value of land could not be added separately in view of decision of Calcutta High Court in cases of Smt. Ashima Sinha and J. N. Bose (supra). He also urged that there was no question of valuation of incomplete portion because accumulation of building materials cannot be said to be assets for purpose of wealth-tax. ld. counsel for assessee urged that for asst. yrs. 1975- 76 and 1976-77 third floor was constructed and occupied by assessee for her own residence. He, therefore, submitted that this portion also was to be valued on proportionate rental basis in view of decision of Supreme Court in case of Dewan Daulat Rai Kapoor (supra). He invited our attention to decision of Tribunal in case of Smt. Kusum Mehta [(WTA Nos. 225 to 228/Cal/1980 dt. 7th Jan., 1981) wherein same view has been taken by Tribunal. ld. Counsel for assessee, therefore, wanted us to uphold order of AAC for each of assessment years under appeal.] ld. DVO who was also present before us tried to support his predecessor's report by stating that plan for building was sanctioned by Municipal Authority for construction up to 7th floor. He urged that there was, therefore, tremendous potentialities for unconstructed portion and value of which should be included in addition to value for constructed portion. He also urged that land value should be taken into consideration while determining value of entire property. We have heard submissions of both parties including DVO and considered facts on record. undisputed fact is that for asst. yrs. 1973-74 and 1974-75, ground, first and second floors of premises at 129A5 S. P. Mukherjee Road, Calcutta, were entirely tenanted and third floor was under construction. low is now fairly settled that premises or part thereof which is entirely tenanted should be valued by adoption of rental method. Calcutta High Court in case of Smt. Ashima Sinha (supra) held that when property is valued on rental basis, result is value of land and buildings taken together. value of land cannot be added again. That would amount to valuation of land twice. Bearing principles laid down in aforesaid case, we are unable to concede to submissions made by ld. Departmental Representative and DVO that value of land should be separately added while determining value of premises on rental method. Accordingly, it has to be hald that AAC was justified in excluding value of land while determining value of property in question on rental method. We uphold orders of AAC on this point. next question which now remains to be considered is approximate number of years' purchase that should be followed, i.e., determination of appropriate multiplying factor. It was case of assessee that at material time rate of interest on capital investment was not less than 10 per cent. So also, rate of interest on fixed deposit with banks. In this connection reference may be made to decision of Supreme Court in case of Union of India vs. Shanti Devi & Ors. reported in 4 SCC at p. 542 wherein their Lordships observed inter alia as follow: "A perusal of decision referred to above and some other which have n o t been cited here show that in India multiplier which is adopted in determining compensation by capitalisation method has been 33-1/3, 25, 20, 16-2/3, 11 and 8. number of years' purchase has gradually decreased as prevailing rate of interest realisable from safe investments has gradually increased higher rate of interest, lower number of years' purchase. This method of valuation involves capitalising net income that property can fairly be expected to produce and rate of capitalisation is percentage of return on his investment that willing buyer would expect from property during relevant period. It was once fiet that relevant rate of interest that should be taken into consideration was interest which gift-edged securities or Government bonds would normally fetch. safety and liquidity of investment in bonds were relied on as twin factors to take view that interest on gift-edged securities should alone be taken into consideration. This was at time when there were not many avenues of safe investments in private commercial concerns was not quite reliable. But from year 1959-60 circumstances have gradually changed. There are many State Banks and nationalised banks in which deposits made are quite safe. Even in share market we have many blue chips which command stability and other attendant benefits such as possibility of issue of bonus shares and rights shares and appreciation of value of shares themselves. They are attracting lot of capital investment. return of 10 per cent, per annum of such safe investments is almost assured. To day nobody thinks of investing on land which would yield net income of just 5 per cent to 6 per cent per annum. higher return of order of 10 per cent is annually anticipated." Gujarat High Court also has occasion to consider similar question i n case of CIT vs. Vimlaben Bhagwandas Patel (1979) 13 CTR (Guj) 27: (1979) 118 ITR 134 (Guj), [wherein it was observed that net average yield of preference devidend was between 12 and 13 per cent as indicated in report of Reserve Bank of India. rate of capitalisation should, therefore, not be unreal and must have regard to commercial rate of return after taking into consideration various constraint and insecurities in property market. Bearing in mind principle laid down in aforesaid cases as also considering facts and circumstances of instant case, we are of opinion that AAC was justified in adopting multiplying factor of 10.] We, however, see that AAC while determining value of property We, however, see that AAC while determining value of property i n question for asst. yrs. 1973-74 and 1974-75 had not taken into consideration value of third floor which was under construction. As has been held by Madras High Court in case of CWT vs. S. Venugopala Konar & Ors. (1977) 109 ITR 52 (Mad), that in respect of any incomplete construction, normally there cannot be any market value as on successive valuation dates on basis of progress in construction works and only manner in which value of such incomplete construction as on different valuation dates could be arrived at will be by finding out actual amount spent on construction as on different valuation dates. That being position, we are of opinion that year-wise investment of assessee for construction of third floor of premises should be added to value that would be determined by adoption of rental method as discussed herein before. We, therefore, direct WTO to recompute value of premises in question for asst. yrs. 1973-74 and 1974-75 in light of observations that we have made above. We, however, reject contention of ld. Departmental Representative s also DVO that potential value of unconstructed portion of premises, for which plan had been sanctioned by Municipal Authority, should be taken into consideration separately for valuation of house property on rental method, inasmuch as we are of opinion that there cannot be any potential value for asset which was not in existence on respective valuation dates. Coming to asst. yrs. 1975-76 and 1976-77, we see that it is admitted position that during relevant valuation dates for these two assessment years ground floor, first floor and second floor were entirely tenanted and third floor was occupied by assessee herself for her residence. We have already held that tenanted portion of building would be valued on rental method. Therefore, only question left for consideration is regarding valuation of third floor which was being occupied by assessee herself for her own residence. In this connection, reliance may be placed on decision of Supreme Court in case Dewan Daulat Rai Kapoor (supra), where it has been held that it is difficult to see how annual value of building could vary according as it is tenanted or self-occupied building. It, Therefore, follows that there is no difference between method of valuation in respect of tenanted property and self-occupied building. Therefore, while determining value of third floor of building, rental method has to be applied. We see that AAC had arrived at same conclusion. Therefore, we consider it unnecessary to interfere with orders of AAC for these two years. In result, appeals for asst. yrs. 1973-74 and 1974-75 are allowed in part, while appeals for asst. yrs. 1975-76 and 1976-77 are dismissed. *** WEALTH-TAX OFFICER v. CHANDABEN SHAH