Rent capitalisation valuation excludes separate reversionary value, as reaffirmed in the building valuation dispute.

Where the rent capitalisation method is used to determine a building's value, reversionary value is not to be added separately to that valuation. The Allahabad High Court followed its earlier decision on the same valuation issue and reaffirmed that the capitalised rent figure already represents the building value for this purpose. The issue was answered against the Revenue and in favour of the assessee, with no separate addition for reversionary value.

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Issues: Whether reversionary value can be added to the value of a building determined by the rent capitalisation method.

Analysis: The Court followed its earlier decision on the same valuation question and held that, where the rent capitalisation method is adopted, the reversionary value is not to be separately added to the building's value.

Conclusion: The question was answered against the Revenue and in favour of the assessee; reversionary value is not to be added to the value of the building arrived at by the rent capitalisation method.

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