Lease rent includes tenant-paid municipal taxes when computing rateable value under municipal taxation rules.

Municipal taxes payable by a tenant under a lease are treated as part of the rent when fixing rateable value under Rule 7(1). The provision contemplates deduction of 10 per cent from annual rent in lieu of all allowances, so the annual rent is taken as the full consideration received under the lease. Although the Act does not define rent, its meaning is informed by section 105 of the Transfer of Property Act and may include money or any other periodic thing of value. Where the tenant pays municipal taxes, the landlord is relieved of a statutory burden, and that payment forms part of the lease consideration.

---

---

Issues: Whether municipal taxes payable by the tenant under the lease form part of the "rent" for determining rateable value under Rule 7(1) of the Taxation Rules in Chapter VIII of the Schedule to the Bombay Provincial Municipal Corporations Act, 1949.

Analysis: Rule 7(1) requires deduction of 10 per cent from the annual rent and states that the deduction is in lieu of all allowances for repairs or on any other account whatever, indicating that the annual rent must be taken as the full consideration received under the lease. The expression "rent" is not defined in the Act, and the meaning was gathered with reference to Section 105 of the Transfer of Property Act, under which rent may consist not only of money but also of any other thing of value rendered periodically or on specified occasions. Where the lease makes the tenant liable to pay municipal taxes, that payment relieves the landlord of a statutory burden and forms part of the consideration of the lease. Such payment is therefore in the nature of rent and cannot be excluded in computing rateable value.

Conclusion: Municipal taxes paid by the tenant under the lease are includible in rent for the purpose of determining rateable value, and the challenge to the assessment failed.

---