TaxTMI 
TaxTMI 
2003 (2) TMI 30
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....nd (c) of section 2(1) were as under: "2. Definitions.--(1) 'annual value' notwithstanding anything contained in any other law for the time being in force, means,--... (b) in the case of any house or building together with its appurtenance or any furniture that may be let for use and enjoyment therewith, the gross annual rent- (i) to be calculated on the basis of fair rent fixed under the law relating to rent restriction for the time being in force; or (ii) where no fair rent referred to in item (i) is fixed, at which it is expected to be let or it is actually let, whichever is greater, subject to the following deductions; (1) a deduction not exceeding twenty per centum of the gross annual rent as the committee in each particular case may consider a reasonable allowance on account of the furniture let therewith; (2) a deduction of twelve and a half per centum. for the cost of repairs and for all other expenses necessary to maintain the building in a state to command such gross annual rent. The deduction under this sub-clause shall be calculated on the balance of the gross annual rent after the deduction, if any, under item (1); (3) where land is let with a building such dedu....
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....sing the present market value of the land, the cost of erecting the building and depreciation shall be such as may be decided by the Government. Different rates may be determined for different categories of buildings and lands; (iii) if the actual annual rent received by the owner is higher than the annual value as determined, then the actual annual rent shall be deemed to be the annual value for the purpose of this Act; (iv) the annual value of the building so determined shall be subject to a deduction of ten per cent. for the cost of repairs and other expenses necessary for the proper maintenance of the building; (v) when a building is occupied by the owner under such exceptional circumstances as to render a valuation at five per centum on the cost of erecting the building, less depreciation excessive, a lower percentage may be taken;" From the aforesaid provisions, it would be clear that prior to the amendment the annual value of any house or building was to be calculated on the basis of fair rent fixed under the law relating to rent restriction for the time being in force and where no such rent had been fixed then it was to be determined at such rent at which such building ....
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....perty 5 per cent. of the annual value of the property; (iii) Rebate on annual maintenance 10 per cent. of the annual value of the property, after rebate; (iv) Annual value after rebate 90 per cent. of the annual value; (v) Land and building tax (a) 2.5 per cent. of the annual &....
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....nto account); (ii) Annual value of the property 5 per cent. of the annual value of the property; (iii) Annual rebate on account 10 per cent. of the annual value of of maintenance the property; (iv) Annual value after rebate 90 per cent. of the annual value; (v) Land and building tax 5 per cent. of the annual value. Note: If the actual annual rent of the property is more than the annual value of the land, then the annual rent of the property shall be taken to be the annual value of the building." The validity of the amended provisions and....
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....ke place in a particular area during a certain period. These rates by and large reflect the correct market value of the land in that area and, therefore, the basis as adopted by the State Government cannot be said to be unreasonable or arbitrary so as to make the provision violative of article 14 of the Constitution. Since the market rate of the land as fixed by the Collector is based on the average of the actual sale transactions that have taken place, the rates so fixed may in some cases be slightly more than the actual value while in some cases even less. This by itself will not make the provision arbitrary even though it may cause hardship in some isolated case. Determination of the value of land on the basis of the Collector's rates is one mode of determining the value of the land. This mode cannot be struck down as arbitrary and violative of article 14 of the Constitution merely because there may be some other mode(s) of determining the value of land unless the one adopted/prescribed by the State Government is shown to be patently unreasonable. We have, therefore, no hesitation in rejecting both the contentions. Before concluding, we may also notice an additional objection r....