1985 (11) TMI 31

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.... with principles of valuation of properties ?" The assessee, a practising doctor, owned 10 grounds of land with a building at Poonamallee High Road, Madras. This asset was used by the assessee for running a private hospital. For the assessment year 1975-76 the assessee filed return under the provisions of the Wealth-tax Act, 1957, disclosing a net wealth of Rs. 2,89,300. The assessee, while valuing the asset, adopted the value of the land at Rs. 2,00,700 representing the cost and the depreciated value of the building at Rs. 4,75,901 as shown in the accounts and book value of furniture, fittings and medical equipment. The property had been leased to a private limited company formed by the assessee on a monthly rent of Rs. 9,000 which cons....

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....for the purpose of wealth-tax. On the basis of Rs. 5,000 as the monthly rental, the value of the building was determined at Rs. 8,00,000. This was accepted by the Tribunal. A reference application under section 27(1) having been dismissed, the present application has been filed under section 27(3) of the Wealth-tax Act, 1957, praying for a direction to the Tribunal to refer the above said question. Two points are raised by the learned counsel for the Revenue in support of his contention that the proposed question of law has to be directed to be referred. Firstly, he contended that the potential rental value should have been taken into account and not the rental actually paid. The Tribunal had found as a fact that Rs. 5,000 received by th....

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....ossibility of any other circumstance being taken into account such as future prospect of getting increased rent. It may be a different matter if the building is valued not on the basis of multiple of the annual rental value but on a different method in which case the future prospects of being put to a better use or to other purposes may have to be taken into account for valuing the building, as in the case of an agricultural land, with potential value as a house site. However, when the determination is with reference to the annual rental value, the rent fetched or reasonably expected as on the date of valuation is the only relevant matter and not the future rent that it may fetch. We are, therefore, unable to agree with the learned counsel ....