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TaxTMI 
TaxTMI 
TaxTMI 
2005 (3) TMI 29
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....der section 7(1) of the Wealth-tax Act based on market rent or rent receivable after ignoring municipal valuation which was based on actual rent paid for the building by the tenant-firm constituted by the assessee and family members as partners?" The assessee had preferred four appeals, W.T.A. Nos. 357 to 360/Coch/ 1991, for the assessment years 1983-84 to 1986-87, before the Income-tax Appellate Tribunal, Cochin Bench. The first ground, which is common in all the four appeals, was with regard to the valuation of a multi-storeyed building belonging to the assessee at Changanacherry town. The assessee had constructed a building on a plot of 7 cents of land in the heart of Changanacherry town which consists of basement and five floors includ....
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.... Counsel submitted that in respect of Swapna Jewellery the rent was fixed as Rs. 1,500 per month as per the lease deed and there is no provision under which enhanced rental value can be adopted in the matter of valuation of the property. Counsel further submitted that in respect of that area the value should have been taken as per the municipal valuation under Schedule III. Senior standing counsel for taxes, Sri P.K. Ravindranatha Menon, submitted that there was a proper reference to the Valuation Officer and he has rightly valued the asset. So far as Swapna Jewellery is concerned, the area let out is 59.58 sq. metres only whereas Choice Readymade Shop is occupying 64.48 sq. metres. Counsel pointed out that the assessee's family members are....
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....rea the property is situated for the purposes of levy of property tax or any other tax on the basis of such assessment, whichever is higher; (ii) where the property is not let, the amount of annual rent assessed by the local authority in whose area the property is situated for the purpose of levy of property tax or any other tax on the basis of such assessment, or, if there is no such assessment or the property is situated outside the area of any local authority the amount which the owner can reasonably be expected to receive as annual rent had such property been let. Explanation. - In this rule,- (1) 'annual rent' means,- (a) where the property is let throughout the year ending on the valuation date (hereinafter referred to as 'previou....
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....e amount calculated as aforesaid exceeds the interest actually paid; (iv) where the owner has received any amount by way of premium or otherwise as consideration for leasing of the property or any modification of the terms of the lease, by the amount obtained by dividing the premium or other amount by the number of years of the period of the lease; (v) where the owner derives any benefit or perquisite, whether convertible into money or not, as consideration for leasing of the property or any modification of the terms of the lease, by the value of such benefit or perquisite; (2) 'rent received or receivable' shall include all payments for the use of the property, by whatever name called, the value of all benefits or perquisites whether co....
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.... gross maintainable rent. For the building let out there is no compulsion that the authority should adopt the rent for which it is let out. The authority can assess the rent which is receivable and also the annual rental value assessed by the municipality. The Legislature has advisedly used the expression "whichever is higher", which gives an option to the assessing authority. In a given case if the assessing authority finds that the rent which is claimed by the owner is not the rent receivable, the authority can always assess the rent which is receivable, or in a given case can go for the municipal assessment. But, the choice is on the assessing authority. The assessing authority has got jurisdiction in a given case to assess the rent rece....