Wealth-tax building valuation: averaging rental and cost methods upheld where non-owned facilities were excluded from rent.

For wealth-tax valuation of a let-out building, the rental method had to exclude the portion of rent attributable to lifts and electrical installations not owned by the assessee, because that component could not form part of the building's assessable value. In these circumstances, the Tribunal's use of the average between the rental valuation and the value based on cost of construction plus land was treated as a rough but acceptable method of determining value, and not as arbitrary or contrary to law. The valuation method was upheld, with the issue decided in favour of the assessee and against the Revenue.

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Issues: Whether the Tribunal was in valuing the building for wealth-tax purposes by taking the average of the value arrived at by the rental method and the value based on cost of construction and land.

Analysis: The building was let out, but the lifts and electrical installations necessary for commercial use were not owned by the assessee. Since part of the rental value was attributable to such facilities, that component had to be excluded while applying the rental method. In the circumstances, the Tribunal's adoption of an average between the rental valuation and the combined cost of construction and land was treated as a rough but acceptable method of determining the assessable value, and not as arbitrary or contrary to law.

Conclusion: The method adopted by the Tribunal for valuing the building was upheld and the question was answered in favour of the assessee and against the Revenue.

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