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2010 (7) TMI 446 - ITAT, AHMEDABADAddition of income - The valuer has valued the property at Rs. 28,90,000/- as against the value disclosed by the assessee at Rs. 4,02,850 - The DVO has replied that the rent as shown by the assessee was a depressed figure and did not correspond to the going rates of tenanted properties in the area, hence, he has adopted the “Rent Capitalization” on the basis of “Standard Rent” as per the procedure - assessee primarily argued that the rent as accepted in the Income-tax proceedings should also have been made the basis for the valuation of the property for wealth-tax purposes - Decision of Diwan Daulat Rai vs. New Delhi Municipal Committee reported as (1979 -TMI - 5832 - SUPREME Court) and Shila Kaushik reported as (1981 -TMI - 5859 - SUPREME Court) – the position in law is that if there had been no rent restriction law in operation, then Revenue could make a fair and an objective estimate of the rent which the property might have fetched, but the operation of the Rent Restriction Act makes all the difference - It was held that the position in law is that if there had been no rent restriction law in operation, then Revenue could make a fair and an objective estimate of the rent which the property might have fetched, but the operation of the Rent Restriction Act makes all the difference whether the DVO has the right or not to determine the valuation of the property by adopting a rent capitalisation method - In the case of Bharat Hari Singhania reported as (1994 -TMI - 40177 - SUPREME Court) – the Apex Court has commented, while dealing with the issue of the applicability W.T.Rules, that the Rules making authority has since prescribed only one method, then it is not a matter of choice and it is otiose whether it is directory or mandatory. Further commenting on the scope of powers of the DVO it was held that a Valuation Officer as much bound by the said rules of valuation as anybody else is. - Decided in favor of assessee.
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