TaxTMI 
TaxTMI 
1992 (10) TMI 120
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....on the valuation dates relevant for the asst. yrs. 1976-77 to 1979-80 held the following immovable properties. (1) 229/640 shares in property situated at Municipal 6926 Jaipuria Mills Clock Tower; Subji Mandi, Delhi (also known as Jaipur Spinning Mill). The property with total area measuring 91,640 sq. yds. houses mills, offices, shops, workshops, godowns and some residential quarters. It is a freehold property fully occupied by tenants numbering about 250. (2) Property No. 6943/3 situated atKohlapur Road,Delhi. The property, comprising of residential building and godown, is built on freehold land measuring 650 sq. yds. The residential portion is under self-occupation while godown is rented to different parties. (3) 6/16 share in p....
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....tion raised in the additional ground was vexatious and of considerable importance and be heared by a Special Bench consisting of three or more members of the Tribunal. The Bench accordingly sent its recommendations to the Hon'ble President who agreed and constituted a Special Bench to hear the appeals. The additional question to be considered was framed as follows: "Whether, the provisions of Sch. III of the WT Act, introduced w.e.f.1st April, 1989would be applicable in all the matters pending in appeal proceedings for valuation of properties?" This is how the appeals were posted for hearing before the Special Bench. 4. Shri Anil Kumar Chopra appearing for the assessee drew attention of the Bench to the background of the case. A....
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....Bench directed that the said property be assessed by capitalising the rent after allowing deduction @ 25% for the outgoings and by applying multiple of 12. 8. In respect of property situated atKohlapur Road, the Bench directed that the value of residential portion be determined under r. 1BB of WT Rules. The value of let out portion be taken at by rent capitalisation method to be worked out on the basis suggested in respect of property at Katra Gauri Shanker. Shri Chopra, learned counsel for the assessee pointed out that the facts and circumstances in the assessment years now before the Bench were similar to facts prevailing in the years disposed of by the Tribunal as per order dt. 24th Nov., 1982 except that addition on account of rev....
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.... by the rent capitalisation method. The difference found represents reversionary value of land taken into account by the intending seller/purchaser of the property. The property is purchased with expectation that after economic life of the building is over, the land would revert back to the owner without encumbrance. Thus, in case of a tenanted property, addition on account of reversionary value of land is a must. Shri Kohli, in this connection, relied upon the decision of Hon'ble Punjab & Haryana High Court in the case of Dina Nath vs. CED (1970) 77 ITR 193 (P&H). Shri Kohli stressed that the property Jaipuria Spinning Mill is old and dilapidated property having limited life. It has large area of open land. A prospective buyer of this prop....
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....Court repelled this contention and held that reversionary value of land was not a factor to be considered while determining the fair market value of property. The Court held that it is impossible to pull down a building which is partly occupied by tenants. The applicability of rent control legislation makes it difficult, virtually impossible to get rid of tenants. The Court approvingly referred to decision of Calcutta High Court in the case of CIT vs. Ashima Sinha (1979) 116 ITR 26 (Cal) wherein it is observed that when a property is valued on the rental basis, the resulting value is value of land and building taken together. The value of land cannot be added again by adding the "reversionary" value of the land because the building is very ....