1984 (9) TMI 28

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....red by JAGANNATHA SHETTY J.-These are references under section 27(1) of the Wealth-tax Act, 1957. The common question referred is: " Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that a deduction of 10% has to be allowed on the property owned by the co-owners even when the valuation is made on rental capitalisation method ? The facts l....

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....nerally the Tribunal allows 10% allowance while determining the fair market value of a co-owner's share. The question is, whether such allowance or deduction at the rate of 10% is justified even when the valuation is determined by adopting the rental capitalisation method. Mr. Srinivasan, learned counsel for the Department, urged that when once the rent is ascertained and a proper multiple i....

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....it has always a market value which has to be ascertained as on the valuation date, that is, the price it would fetch if sold in the open market on the valuation date. The valuation by rental capitalisation method depends upon the rent actually paid in respect of the premises occupied by tenants or on the rental value of the self-occupied buildings. After so ascertaining the annual rental value, it....

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....f an absolute ownership. There are inherent disadvantages and difficulties of enjoying a co-owner's share by the purchaser if it is gold in the open market. In Lalita Jabbar v. Competent Authority [1982] 133 ITR 389, 396, the Calcutta High Court observed that an undivided half share of the property purchased would not and could not be half of the value of the entire property if sold in the open....