J D ITALIA Vs. CONTROLLER OF ESTATE DUTY

JUDGEMENT

(1.) The following three questions have been referred to this Court for its opinion :

(2.) As regards the first question, it is necessary to state a few facts. Dinroze Estate is Situated in Mount Road, Madras. The deceased had 1/3rd interest in that estate. It comprised of about 126 grounds on which there are buildings except on 10 grounds. The accountable person had submitted a valuation report obtained from an approved valuer. That report disclosed the value of the estate at Rs. 32,45,000/-. The accountable person wanted that the valuation of the property should be by capitalising the rent, as that property was occupied by the tenants and the provisions of the Rent Control Act applied. But the Assistant Controller was of the view that the ground and the buildings thereon should be separately valued and, on that basis, determined the agreegate value of the Dinroze Estate as on the date of the death of the deceased at Rs. 44,20,400/-. The Appellate Controller took into account the valuation made by the Assistant Controller and also the rent capitalisation method and took the average and put the total value of the estate at Rs. 40,44,950/-. On further appeal to the Tribunal, the Tribunal adopted the rent capitalisation method and determined the value at Rs. 35,40,185/-. Hence this reference under S. 64(1) of the Estate Duty Act at the instance of the Revenue.

(3.) Admittedly, except on 10 grounds the entire land is covered by buildings. All the buildings standing thereon have been rented out and the Rent Control Act is applicable to the buildings in the Dinroze Estate. The question is : What is the proper method to be adopted for arriving at the value of the buildings at the time of the death of the deceased ?