HIMALAYA TRADING CO Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE petitioner has filed a petition under S. 27(3) of the WT Act being WT Case No. 34 of 1985 seeking a direction that the following questions of law be stated and referred to this Court :

(2.) AS far as question No. 1 is concerned, learned counsel for the petitioner submits that rule I BB is applicable and the value of the residential house should be calculated on the basis thereof. 'The question as to whether the said rule applies or not is a pure question of law as held by the Karnataka High Court in CWT vs. Vidyavathi Kapur (1984) 150 ITR 319, and followed by this Court in WT Case No. 188 of 1983 decided on 3rd March, 1987 ( CWT vs. Himalaya Trading Co. (1987) 168 ITR 596 ).

(3.) QUESTIONS Nos. 4 and 5 refer to valuation of the premises at 12, Prithvi -raj Road. These premises were let out to the Spanish Embassy during the relevant assessment years. The premises were sold on 2nd Feb., 1973. What the Department has done, and which was been upheld by the Tribunal, is that the sale value has been made the basis for working out the market value of this house for the earlier assessment years. Whether this is permissible or not is a question of law, especially in view of the decision of this Court in CIT vs. New India Construction Co. (1980) 123 ITR 68, where it has been held that if there are tenants in the property, normally the method to be adopted is the "rent capitalisation" method.