1985 (2) TMI 80

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....te of the deceased should be taken to be 8.5 or 12 ? " 2. Smt. Mina Devi Bengani expired on 24-1-1979. She was owning before her death movable and immovable properties. The immovable property owned by her included the property of 25A, Khagendra Chatterjee Road, Calcutta. This property consisted of about 44 godowns, which were used for storing raw jute and other materials. The gross rent receivable from the godowns amounted to Rs. 46,462. The ITO after considering the outgoings, took the net rent of the godowns at Rs. 32,965. The accountable person declared the value of this property on the death of the deceased at Rs. 3,72,000, which was subsequently revised at Rs. 2,95,933 through a letter. The value shown by the accountable person was ....

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....talizing the net rent, the issue has been referred by the President to the Third Member. 5. The counsel of the accountable person stated the facts and urged that all the godowns were let out and, therefore, rule 1BB or the Special Bench decision in Biju Patnaik's case is not applicable on the facts of the case. He further indicated that the multiple of 8.5 times was reasonable and he relied on Smt. Vimlaben Bhagawandas Patel's case. He also referred to the commentary of the learned author, C.A. Gulanikar, at page 2.66 of Law & Practice of Gift-tax & Wealth-tax, 1984 edition. He further urged that assistance could also be taken from the decision in Smt. Shanti Devi's case. The counsel further stated that if the investments in fixed deposi....

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....cial Member. Once the property is wholly let out, the only method is the capitalization of net rent and the same has been adopted by the Assistant Controller. There is no dispute over this fact. As the property in question was a commercial one, the question of application of rule 1BB or the decision of the Special Bench in Biju Patnaik's case does not arise. Therefore, the only question is that what is the proper multiplier which could be applied for capitalizing the net rent for the market value of the property on the death of the deceased. The valuation is to be made on 24-1-1979. It is to be seen what yield would a prudent businessman expect who would like to invest in real estate. The Gujarat High Court in an acquisition case in Smt. Vi....