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of <h1>Property value upheld based on Rent Control Act; Tribunal dismisses appeal, citing relevant rules & SC decisions.</h1> <h3>INSPECTING ASSISTANT COMMISSIONER. Versus BP. INDIAN AGENCIES JOINT ENTERPRISES LTD.</h3> INSPECTING ASSISTANT COMMISSIONER. Versus BP. INDIAN AGENCIES JOINT ENTERPRISES LTD. - TTJ 033, 633, Issues: Valuation of property based on maintainable rent under Bombay Rent Control Act.In the judgment by the Appellate Tribunal ITAT BOMBAY-B, the appeals related to the assessment years 1984-85 and 1985-86, filed by the Department. The primary issue was the valuation of a property purchased by the assessee, initially being a tenant of the same property. The dispute arose when the IAC (Asst) estimated the gross maintainable rent at Rs. 60,000 per annum, while the assessee returned a lower value in its wealth-tax return. The CIT(A) directed the IAC(A) to determine the value of the property based on the standard rent under the Bombay Rent Control Act, which the Department contested. The Department argued that the property's location in a posh area could fetch a higher rent, making the CIT(A)'s direction incorrect. The Department also challenged the CIT(A)'s reliance on previous court decisions, asserting that the amendment in 1975 to the provisions of s. 23(1) rendered those decisions inapplicable.The learned counsel for the assessee contended that the decisions of the Supreme Court in the cases of Daulatrai Kapur and Sheila Kaushish remained relevant even after the 1975 amendment to s. 23(1). The assessee maintained that the property's value should be based on maintainable rent as it was used for residential purposes. The IAC's error was substituting maintainable rent for the standard rent under the Rent Control Act. The Tribunal heard both parties and found the CIT(A)'s orders reasonable for the two years in question. It was established that r. 1BB would apply, and the property had to be valued in accordance with it. The Tribunal upheld the CIT(A)'s decision to determine the maintainable rent under the Bombay Rent Act, citing the provisions of the Rent Control Act and the Supreme Court decisions as supporting grounds. The Tribunal clarified that the 1975 amendment to s. 23(1) did not impact the issue at hand, and the Supreme Court decisions remained applicable.In conclusion, the Appellate Tribunal ITAT BOMBAY-B dismissed the appeals, affirming the CIT(A)'s direction to determine the property's value based on maintainable rent under the Bombay Rent Control Act. The Tribunal emphasized the applicability of r. 1BB and the Rent Control Act provisions in determining the property's valuation, disregarding the Department's arguments regarding the property's potential rental value. The Tribunal underscored the relevance of the Supreme Court decisions and the inapplicability of the 1975 amendment to s. 23(1) in the present case.
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