2003 (11) TMI 40

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....e assessee's contention that the property at No. 17, Greams Road, Madras, should be valued on the basis of rent capitalisation method for determining the taxable wealth under the Wealth-tax Act? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in rejecting the assessee's contention that the property at Ooty should be valued on the basis of rent capitalisation method for determining the taxable wealth under the Wealth-tax Act? (3) Whether, on the facts and in the circumstances of the case, the Tribunal should hold that applying the decision of the Supreme Court in the case of F.S. Ghandhi [1990] 184 ITR 34, that as the assessee was not occupying the land as a lessee under any lease agreement, the p....

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....ining the market value. The Tribunal has affirmed the order of the Commissioner. It is contended for the assessee that having regard to what is provided in Schedule III the only permissible method of valuation was the "rental method" so far as the building is concerned, as it is undisputed that the building has in fact been leased out and that the assessee has been receiving rents. The fact that it is let out to a sister concern would not on that score make the method of valuation set out in Schedule III of the Act inapplicable. Schedule III of the Act, it was submitted, though it was introduced with effect from April 1, 1989, being a procedural provision, is applicable as the matters were pending before the authorities at the time the S....

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....er, nothing in the order of the Assessing Officer or the other authorities to show that it was not practicable to apply the rental method. The finding of the authorities on the other hand, is that there has been letting and that the assessee has been receiving rents, the identity of the lessee also being known. The only reason given by the authorities for not adopting the rental method is that in their view the rent received was nominal as the letting was to a sister concern. The fact that in the view of the authority the rent received by the assessee is a nominal rent would not by itself render rule 3 inapplicable as it cannot be said that it becomes impracticable to apply rule 3 by reason of the view of the authority that the rent is n....

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....f wealth, therefore, has to be in accordance with the mode of valuation set out in the Act. The mode of valuation set out in Schedule III does not provide for a situation where the rent actually received by the assessee is in the view of the Assessing Officer, nominal. As long as the rent reported by the assessee is in fact the true and correct amount received by the assessee from its lessee and the letting is not make believe but is genuine, it is the actual amount received on such letting which has to be taken note of and cannot be ignored on the sole ground that in the view of the Assessing Officer it is nominal. The first two questions, therefore, are required to be and are answered in favour of the assessee and against the Revenu....