1984 (3) TMI 17

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lf storeyed building. The ground floor was given by the transferor on lease to Radhey Mohan at a monthly rent of Rs. 480 on April 1, 1970. The first floor of the building was in occupation of the transferor himself. He filed a suit for ejectment against the tenant on December 17, 1972, and obtained a decree on September 5, 1973, on the basis of a compromise. On September 4, 1973, the transferor agreed to sell one-fourth share of the property to Radhey Mohan, tenant (hereinafter called " the transferee "), for a consideration of Rs. 27,500. Three more agreements to sell were entered into by the transferor subsequently, two with Brij Mohan, transferee, and one with Radhey Mohan, transferee, for one-fourth share each. Brij Mohan is the brot....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....late Tribunal, Amritsar, against the orders of the Competent Authority, four by the transferor and two each by the transferees. The Tribunal held that the most appropriate method to determine the value of the property was the rent capitalisation method and applying that principle, its value came to Rs. 1,08,000 only. Consequently, it accepted the appeals and reversed the judgment of the Competent Authority. The Commissioner of Income-tax has come up in appeal to this court. It is contended by Mr. Ashok Bhan that the order of ejectment had been passed by the civil court against Radhey Mohan, tenant, before the execution of the sale deed regarding the ground floor and that the first floor was in occupation of the transferor lie further sub....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....efore, the method which is generally resorted to in determining the value of the land with buildings, especially those used for business purposes, is the method of capitalisation of return actually received or which might reasonably be received from the land and the buildings. " The above principle can, in our view, be made applicable in determining the fair market price under the I.T. Act. In this view, we are fortified by the observations of this court in CIT v. Prem Nath Anand [1977] 108 ITR 549. Similar view was taken in Wenger and Co. v. District Valuation Officer [1978] 115 ITR 648 (Delhi), CIT v. Smt. Vimlaben Bhagwandas Patel [1979] 118 ITR 134 (Guj), Product Kumar Dutta v. Competent Authority IAC [1982] 134 ITR, 42 (Cal) and CIT....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of standard rent or the building was occupied by the owner himself. Therefore, in all such cases, the annual value of the building for purposes of house tax was limited to the measure of the standard rent determinable on the principles laid down in the Rent Control Act and it could not exceed such measure of standard rent. It is evident from the above observations that for determining the annual value of the property whether it is occupied by a tenant or by the landlord, the principle applicable is as to what rent the landlord is entitled to charge from the tenant. Similarly, for finding out the fair market value of the property in the possession of an owner himself, its hypothetical rent, taking into consideration the rents prevailing in ....