Gross maintainable rent valuation under rent-control law raises a referable question of law for wealth-tax purposes.

The article explains that the Tribunal's approach to computing "gross maintainable rent" under rule 1BB, by linking it to "annual reasonable rent" under rent-control law and drawing analogy from "annual value" under section 23(1) of the Income-tax Act, raises a question of law fit for reference. The High Court emphasised that it was not deciding the rival merits of the valuation method, but only whether the Tribunal's conclusion involved a referable legal issue under section 27(3) of the Wealth-tax Act, 1957. The reference was therefore treated as competent, and the Tribunal was directed to state the case for the Court's opinion.

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Issues: Whether the Tribunal's view that the "gross maintainable rent" under rule 1BB should be determined on the basis of the "annual reasonable rent" under the applicable rent control law gave rise to a referable question of law.

Analysis: The applications were under section 27(3) of the Wealth-tax Act, 1957, and the only matter for consideration was whether the Tribunal's order raised a question of law fit to be referred. The Tribunal had linked "gross maintainable rent" under rule 1BB to rent-control concepts and had relied on the analogy of "annual value" under section 23(1) of the Income-tax Act, 1961. The Court held that it was not expressing a final view on the rival merits, but only determining whether the Tribunal's conclusion involved a legal question. It found that the controversy did involve a question of law, and that the principal proposed question was sufficient to cover the dispute.

Conclusion: The reference was held to be competent, and the Tribunal was directed to state the case and refer the question for opinion of the Court.

Ratio Decidendi: Where the Tribunal's determination of the basis for computing "gross maintainable rent" depends on the legal characterisation of rent-control concepts and their interaction with the valuation rule, the matter raises a question of law fit for reference.

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