Rateable value may include rooftop hoarding income where a hypothetical tenant would treat the building's special advantage as part of rent.

In assessing rateable value under section 154(1) of the Bombay Municipal Corporation Act, 1888, the authority may look beyond actual letting rent and include income flowing from advantageous use of the building that a hypothetical tenant would reasonably consider. Extra return from a rooftop advertisement hoarding formed part of the building's beneficial value, and the fact that the arrangement was styled as a licence rather than a lease did not prevent its inclusion. The enhancement in rateable value was therefore upheld in favour of the municipal corporation.

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Issues: Whether, in determining the rateable value of a building under section 154(1) of the Bombay Municipal Corporation Act, 1888, the assessing authority can take into account income derived by the owner from an agreement permitting an advertisement hoarding to be erected on the roof of the building.

Analysis: The rateable value under section 154(1) is based on the annual rent for which the building might reasonably be expected to let from year to year. That inquiry is not confined to the actual rent received from letting the premises for occupation, but extends to all advantages inherent in the property that would influence a hypothetical tenant. Where the building possesses a special amenity or advantageous situation capable of yielding extra income, such additional return is part of the beneficial value of the property and would be taken into account by a prospective tenant in fixing the rent he could afford to offer. The character of the arrangement as a lease or licence, and whether the payment is described as rent or licence fee, is not decisive for rating purposes if the income arises from the beneficial use of the building.

Conclusion: The assessing authority was entitled to include the additional income from the advertisement hoarding in determining the rateable value, and the enhancement was upheld in favour of the municipal corporation.

Ratio Decidendi: In assessing rateable value under section 154(1) of the Bombay Municipal Corporation Act, 1888, any extra income that a hypothetical tenant would reasonably take into account as arising from the building's advantageous use or special amenity may be included, even if the income is derived under a licence rather than a lease.

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