Standard rent governs house property valuation under rule 1BB, and the wealth-tax challenge failed.

House property valuation under rule 1BB was to be made by determining maintainable rent with reference to the standard rent under the Bombay Rent Control law. The Wealth-tax Act valuation scheme under section 7(1) remained applicable, and the Finance Act, 1983 amendment to section 23(1) of the Income-tax Act did not affect this wealth-tax computation. The standard rent concept under the governing rent control statute therefore controlled the valuation exercise, and the departmental challenge was rejected.

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Issues: Whether, for valuation of the assessee's house property under rule 1BB, the maintainable rent had to be determined with reference to the standard rent under the Bombay Rent Control law.

Analysis: The property was required to be valued under section 7(1) of the Wealth-tax Act through rule 1BB. In applying that rule, the maintainable rent was to be worked out on the footing of the standard rent permissible under the rent control statute governing the property. The statutory scheme under the Finance Act, 1983 did not exclude section 7(1) of the Wealth-tax Act from the relevant valuation provision, and the amendment to section 23(1) of the Income-tax Act had no bearing on this wealth-tax valuation question. The standard rent concept under the Bombay rent legislation therefore governed the valuation exercise.

Conclusion: The direction to determine the property's value on the basis of standard rent under the Bombay Rent Control law was upheld and the department's challenge failed.

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