Rental method for tenanted property valuation applies where acquisition material is unreliable, with upward reassessment permitted on evidence.

For a fully let out property, where acquisition-compensation material is unavailable or unreliable, market value should ordinarily be determined by the rental method, using capitalised annual rent as the safest guide to what a willing purchaser would pay. On the facts noted, the property was occupied by tenants and the record did not show how acquisition compensation had been fixed or how landlord and tenant interests were apportioned, so the rental method was approved. The valuation could also be taken on the Tribunal's figure, with liberty to the Wealth-tax Officer to adopt a higher value if the rental method and evidence justified it.

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Issues: (i) Whether the value of a fully let out property, which had been notified for acquisition but for which no satisfactory acquisition material was available, was to be determined by the rental method. (ii) Whether the property value could be taken at the figure suggested by the Tribunal, subject to the Wealth-tax Officer's liberty to adopt a higher figure if warranted on the rental method.

Issue (i): Whether the value of a fully let out property, which had been notified for acquisition but for which no satisfactory acquisition material was available, was to be determined by the rental method.

Analysis: The property was in the occupation of tenants and the material on record did not establish the basis on which the acquisition compensation had been fixed or how the landlord's and tenants' interests had been apportioned. In the absence of definite and better material, the proper approach for a tenanted property was to ascertain what a willing purchaser would pay for such property. The rental method, by capitalising the annual rent, was therefore the safe and appropriate guide for determining market value.

Conclusion: The rental method was rightly adopted, and the answer was in favour of the assessee.

Issue (ii): Whether the property value could be taken at the figure suggested by the Tribunal, subject to the Wealth-tax Officer's liberty to adopt a higher figure if warranted on the rental method.

Analysis: The Tribunal's figure was accepted as the operative valuation basis, but the final valuation was not frozen at that amount. The Wealth-tax Officer was permitted to determine a higher value if, on applying the rental method, the evidence justified such a valuation.

Conclusion: The question was answered in the affirmative in the qualified manner stated by the Tribunal, and the result was in favour of the assessee.

Final Conclusion: The reference was answered by approving rental-method valuation for the tenanted property and by accepting the Tribunal's valuation approach with liberty to reassess upward if warranted on that method.

Ratio Decidendi: Where a property is fully tenanted and reliable acquisition-compensation material is unavailable, market value should ordinarily be determined by the rental method as the safest guide to what a willing purchaser would pay.

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