NEELAVENI S Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) PURSUANT to an order made by this Court under s. 27(2) of the WT Act, the Tribunal, Bangalore Bench, has referred the following questions for the decision of this Court :

(2.) THE question relates to the assessment to wealth-tax for the asst. yr. 1971-72, the relevant valuation date being 31st March,1971. THE assessee, among other properties, owned a residential house situate at Annaswamy Mudaliar Road, near Ulsoor Tank. She also owned another house in Rathna Vilas Road near Basavanagudi. So far as the Rathna Vilas Road property was concerned, the WTO initiated proceedings for reassessment. Such a proceeding was also taken in regard to another property situate at Madras. THE assessee had furnished a valuer's report in regard to the Annaswamy Mudaliar Road house which was self-occupied and the Rathna Vilas Road property which was in the occupation of certain students on a charitable basis under her permission without payment of any rent. THE valuer had furnished an estimated value of the property adopting the land and building method as well as the value computed by capitalisation of the probable rental. So far as the self-occupied property was concerned, the value according to the land and building method was given as Rs. 1,40,790 and on the basis of the rental it was worked out at Rs. 75,640. THE valuer had stated that the building was an old one which would come under the purview of the House Rent Control Act and the more reasonable and fair value to be adopted was on the rental method and the value could be fixed at Rs. 75,000. Similar valuation had been given for the Rathna Vilas Road building which was at Rs. 1,35,000 on the land and building method and Rs. 47,000 on the rental method.

(3.) WHEN evidence is available in regard to the rent which a property is fetching or the rent for which it would be let out, the authorities who have the duty to determine the value of the property cannot ignore the same altogether. It may be that in a particular case the rent fetched may not at all indicate the worth of the property, where there is other direct evidence about the value of the property as in the case decided by this Court in the case of K. Bhoomaimma vs. CED (1978) 115 ITR 703 (Ker). On the facts and in the circumstances of the instant case, the second question formulated above would really be academic in view of the final conclusion we are taking in this case on the first question. But as the question has been formulated in order to allay any doubts about the matter, we would answer the second question by saying that it would not be correct to say that the rental method has no validity at all in determining the valuation of the self-occupied residential house.