Residential property valuation under Rule 1BB applies when main residential use is shown; actual rent governs fully let out property valuation.

Where a residential property is mainly used for residence, valuation under Rule 1BB of the Wealth-tax Rules applies, while a claim to value it by reference to 1 April 1971 under section 7(4) fails unless exclusive residential use is shown. The self-occupied property was therefore brought within Rule 1BB, but not section 7(4). For a fully let out property, the gross maintainable rent is the actual rent received or receivable, and that figure cannot be replaced by a notional rent merely because the tenant is a bank. The rental valuation, including the treatment of collection charges and the multiplier applied, was upheld.

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Issues: (i) Whether the assessee was entitled to have the self-occupied residential property valued with reference to the valuation as on 1 April 1971 or under Rule 1BB; and (ii) Whether, in valuing the fully let out property, the actual rent received could be disturbed and collection charges or a lower multiplier were warranted.

Issue (i): Whether the assessee was entitled to have the self-occupied residential property valued with reference to the valuation as on 1 April 1971 or under Rule 1BB.

Analysis: The property was not shown to be exclusively used for residential purposes so as to attract valuation with reference to 1 April 1971 under section 7(4) of the Wealth-tax Act, 1957. However, the property was mainly used for residence and therefore fell within the scope of Rule 1BB of the Wealth-tax Rules, 1957, which governed valuation of such residential properties.

Conclusion: The claim based on section 7(4) was rejected, but valuation under Rule 1BB was allowed in favour of the assessee.

Issue (ii): Whether, in valuing the fully let out property, the actual rent received could be disturbed and collection charges or a lower multiplier were warranted.

Analysis: For a property fully let out, the gross maintainable rent is the rent actually received or receivable where it exceeds the statutory limit contemplated by Rule 1BB. The rule does not permit substitution of a notional rent merely because the tenant is a bank. The collection charges had already been dealt with on the basis adopted in the income-tax assessment, and the multiplier directed by the appellate authority was not shown to be excessive.

Conclusion: The valuation adopted on the rental basis was upheld and the assessee's challenge on this issue failed.

Final Conclusion: The appeal succeeded only to the limited extent that the first property had to be valued under Rule 1BB, while the valuation of the let out property was sustained.

Ratio Decidendi: Where a residential property is mainly used for residence, valuation under the special residential valuation rule applies, and for a fully let out property the actual rent received or receivable constitutes the gross maintainable rent for valuation purposes.

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