SMT. SUSHILA DEVI TULI v. WEALTH-TAX OFFICER
[Citation -1985-LL-0725]

Citation 1985-LL-0725
Appellant Name SMT. SUSHILA DEVI TULI
Respondent Name WEALTH-TAX OFFICER
Court ITAT
Relevant Act Wealth-tax
Date of Order 25/07/1985
Assessment Year 1977-78
Judgment View Judgment
Keyword Tags transfer of property • valuation report • rateable value • onus to prove • standard rent • yield method • market value • actual rent • annual rent • estate duty • legal owner • sale deed
Bot Summary: The WTO rejected the assessee's claim by observing that the assessee did not own the flat, and he was not eligible for exemption under section 5(1). The matter was carried in appeal on this point also and the learned AAC has accepted the assessee's above plea. For the above proposition the assessee's counsel for the assessee has relied upon the decisions of the Supreme Court in the case of Dr. Balbir Singh v. MCD 1985 152 ITR 388 and in that of Dewan Daulat Rai Kapoor. The actual rent received by the assessee, should normally form the basis for computation of the market value of the property on yield method, unless it could be shown by the assessee that the actual rent received by the assessee would not be received by him in future, and the intending buyer would not take note of the actual rent received by the assessee and would not take note of the actual rent received by the assessee and would not expect the continuation thereof in future. There is no evidence to show that the actual rent being received by the assessee is a fancy rent or an abnormal rent which would not be maintainable in future. Two cases relied upon by the assessee's counsel dealt with the notion of the rateable value of the building, which according to their Lordships of the Hon'ble Supreme Court, would have to be standard rent or less than that, because the said rateable value has to be worked out on the basis of, 'the annual rent at which such building might reasonably be expected to be let from year to year'. If the rent being received by the assessee is maintainable in future the market value by the yield method will have to be worked out in our opinion, on the basis of the actual rent being realized by the assessee unless it can be shown that was not the maintainable rent. The actual rent being realised by the assessee is not in dispute and the working out of the market value, on the basis of the actual rent realization has to be upheld as correct.


These are cross-appeals in respect of assessment year 1977-78. In assessee's appeal question is with regard to valuation of flat No. 604 in M. S. Building, known as New Delhi House, 27-Barakhamba Road, New Delhi. assessee had entered into agreement with builder to purchase said house and to pay Rs. 1,48,460 therefor. price was accordingly paid and possession of said flat was handed over to assessee by said builder. sale deed in respect of said flat has, however, not been executed yet. assessee declared market value of said flat in his hand at Rs. 1,90,000, vide his first return, as per valuation report of approved valuer. Thereafter he revised return and declared value at Rs. 1,53,645, which was cost of assessee's flat. As per assessee revision was done in terms of decision in case of Dewan Daulat Rai Kapoor v. NDMC [1980] 122 ITR 700 (SC) though it was not explained as to how value would be above as per ratio of abovementioned decision. 2. WTO valued said flat at Rs. 4,29,960 on basis of yield method, taking actual yield from said property as basis of computation of aforesaid price and applying thereto multiple of 12.5. In other words, computation in question has been done more or less as per rule 1BB of Wealth-tax Rules, 1957 by WTO. assessee is dissatisfied with this valuation, hence, present appeal by him. 3. assessee claimed exemption under section 5(1) (iv) o f Wealth- tax Act, 1957 ('the Act') in respect of aforesaid flat. WTO rejected assessee's claim by observing that assessee did not own flat, and, therefore, he was not eligible for exemption under section 5(1) (iv). matter was carried in appeal on this point also and learned AAC has accepted assessee's above plea. department is aggrieved of aforesaid finding of learned AAC. This is how revenue is also in appeal before us. 4. On behalf of assessee it was submitted that for purpose of working out valuation on yield basis, yield should be found out by ascertaining standard rent of property and it is this standard rent, which should thereafter be capitalised after allowing suitable deductions from it for repair, etc. For above proposition assessee's counsel for assessee has relied upon decisions of Supreme Court in case of Dr. Balbir Singh v. MCD [1985] 152 ITR 388 and in that of Dewan Daulat Rai Kapoor (supra). He has, however, not indicated as to what this standard rent would be and as to how actual rent contrasted for is not standard rent. 5. On behalf of revenue, it is urged that valuation worked out by WTO was justified as it was in accordance with rule 1BB. 6. We have given careful consideration to facts of case and rival submissions. assessee has had no evidence whatsoever to show that contracted rent is not standard rent or that it is not maintainable in long run and that it has not been contracted for in normal course between willing hirer and willing landlord. As such, there is no material before us to hold that assessee is getting rent from his flat in excess of standard rent or that this rent is not maintainable in future. actual rent received by assessee, should normally form basis for computation of market value of property on yield method, unless it could be shown by assessee that actual rent received by assessee would not be received by him in future, and intending buyer would not take note of actual rent received by assessee and would not take note of actual rent received by assessee and would not expect continuation thereof in future. There is no evidence to show that actual rent being received by assessee is fancy rent or abnormal rent which would not be maintainable in future. onus to prove above position lay on assessee, and he has failed to do so. In absence of such evidence, WTO was, in our opinion, justified in going by actual rent being received by assessee and calculating market value of said property on basis thereof. We find no flaw in his action in this regard. 7. Two cases relied upon by assessee's counsel dealt with notion of rateable value of building, which according to their Lordships of Hon'ble Supreme Court, would have to be standard rent or less than that, because said rateable value has to be worked out on basis of, 'the annual rent at which such building might reasonably be expected to be let from year to year'. In present case, we are not dealing with notion of rateable value but as to what is rent being received by assessee and whether this rent is maintainable in future. If rent being received by assessee is maintainable in future market value by yield method will have to be worked out in our opinion, on basis of actual rent being realized by assessee unless it can be shown that was not maintainable rent. WTO, was, therefore, correct in working out value of property on basis of actual rent received by assessee, and as we have noted above, in absence of any material on record, it is not possible for us to hold that such rent is not maintainable rent or that rent is abnormal or in excess of authority of law. onus to prove this was on assessee and he has failed to discharge this onus. actual rent being realised by assessee is not in dispute and, therefore, working out of market value, on basis of actual rent realization has to be upheld as correct. We, accordingly, upheld it. 8. department's grievance against grant of exemption under section 5(1) (iv) to assessee does not appear to us to have any merit. Firstly, relevant clause (iv) does not prescribe that person should be owner of property, before he can put in claim for exemption under said clause. All that person is required to do to claim exemption under aforesaid clause is to show that he has same interest in property, as to that limited extent, property can be said to belong to him. word 'belonging to' has been considered content of clause (n) of sub-section (1) of section 33 of Estate Duty Act, 1953 and it has been held by their Lordships of Calcutta High Court in case of CED v. Jyotirmoy Raha [1978] 112 ITR 969 that above term will take within its sweep even limited interest in property. For above view, their Lordships relied on decision of Hon'ble Supreme Court in case of Raja Mohammad Amir Ahmed Khan v. Municipal Board of Sitapur AIR 1965 SC 1923, wherein their Lordships defined meaning of term 'belonging to' as follows: "'Though word belonging to no doubt is capable of denoting absolute title, it is nevertheless not confined to connoting that sense. Even possession of interest less than that of full ownership could be signified by that word'." (p. 973) In present case assessee is in possession of flat in question and legal owner, i.e., builder is not in position to dislodge him due to operation of section 53A of Transfer of Property Act, 1908. It can, therefore, be said in his case that flat belongs to assessee, and, this being so, assessee would be eligible for exemption under section 5(1) (iv). Accordingly, we upheld decision of AAC on this account. 9. In result, we confirm order of AAC and dismiss both appeals. *** SMT. SUSHILA DEVI TULI v. WEALTH-TAX OFFICER
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