COMMISSIONER OF WEALTH TAX Vs. ANIL KUMAR RAMPURIA

JUDGEMENT

(1.) In this reference under Section 27(1) of the Wealth-tax Act, 1957, the following question has been referred to this court at the instance of the Revenue for the assessment year 1975-76 :

(2.) Shortly stated, the facts are that the assessee has interest in properties known as Bikaner Building and 38, Shakespeare Sarani. The Wealth-tax Officer valued the aforesaid properties by adopting the yield method. While working out the valuation of the aforesaid properties, he deducted municipal taxes as levied by the Corporation of Calcutta on the aforesaid properties. The gross rental incomes from the two properties as adopted by the Wealth-tax Officer were much higher than the valuations adopted by the Corporation of Calcutta for the purpose of imposition of corporation taxes. The assessee did not object to the adoption of the gross rental value by the Wealth-tax Officer at the figures adopted by him, but pleaded that municipal taxes should also be worked out by him presuming the said gross rental income to be the annual letting value for the purpose of municipal taxes also and such municipal taxes as would be leviable with reference to the above gross rental income should be deducted from the said rental income while computing the value of the said property rather than the actual municipal taxes imposed on the assessee and paid by it. The Wealth-tax Officer did not accept the above contention. The assessee appealed against the aforesaid order of the Wealth-tax Officer to the Appellate Assistant Commissioner who accepted the above plea of the assessee. The Revenue, thereupon, appealed to the Tribunal and pleaded before it that the municipal taxes as levied could alone be deducted from the gross rental income and that the Appellate Assistant Commissioner was wrong in directing otherwise. The above plea of the Revenue was, however, not accepted by the Tribunal, who pointed out that the view adopted by the Appellate Assistant Commissioner had been approved by the Tribunal in the case of Mnlchand Rampuria in WTA Nos. 742 to 746 (Cal) of 1980 and that the Tribunal was in agreement with the reasons given therein.

(3.) At the hearing before us, it has been contended by the learned advocate for the Revenue that the municipal taxes as levied could alone be deducted. He has submitted that Rule 1BB would be applicable in this case for valuation of the property. He has submitted that "net maintainable rent" in relation to a house means the amount of the gross maintainable rent as reduced by the amount of tax levied in the previous year by any local authority in respect of the house. It is his contention that the annual rent as used in Rule 1BB is the actual rent received or receivable by the owner ; accordingly, the Assessing Officer was entitled to take into account the actual rent received for the purpose of determining the gross maintainable rent and the municipal tax actually levied.