Rental yield valuation under Estate Duty Act bars separate deduction for unearned land increase in property valuation.

Where immovable property is valued under the Estate Duty Act on the rental yield basis, separate addition or deduction for the reversionary value of land is unwarranted because that method governs the valuation of the property as a whole. The Tribunal held that, once the rental yield method was adopted for both the land and the superstructure, there was no basis to treat any increase in land value as a distinct component or to consider a separate deduction for unearned increase payable to the lessor. The claim for 50 per cent deduction on that account was therefore not admissible, and the referred question was answered in favour of the Revenue.

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Issues: Whether, for valuation of the property under the Estate Duty Act, 1953, 50 per cent of the unearned increase in the value of the land payable to the lessor was admissible as a deduction when the property was valued by the rental yield method and not by the land and building method.

Analysis: The Tribunal held that the rental yield method was the proper basis for valuing both the land and the superstructure. Once valuation was adopted on rental yield basis, there was no occasion to separately add the reversionary value of land or to consider any increase in land value as a distinct component. On that footing, the claimed deduction for unearned increase in land value did not arise for consideration.

Conclusion: The claim for 50 per cent deduction on account of unearned increase in land value was not admissible. The question referred was answered in the affirmative, in favour of the Revenue.

Ratio Decidendi: Where property is valued on the rental yield basis, separate addition or deduction on account of land value or unearned increase therein is unwarranted because that basis already governs the valuation of the property as a whole.

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