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1984 (12) TMI 64 - SC - Income TaxDetermination of rateable value of certain categories of properties situate in the Union territory of Delhi Held that:- The first category of premises where the premises are sell-occupied residential premises, the standard rent determinable under the provisions of sub-section (2)(a) or (2)(b) of s. 6 in cases falling within the scope and ambit of those provisions and in other cases, the standard rent determinable under the provisions of sub-s. (1)(A)(2)(b) of s. 6 would constitute the upper limit of the rateable value of the premises. Similarly, on an analogous process of reasoning, the standard rent determinable under the provisions of sub-s. (2Xa) or (2)(b) of s. 6 in cases falling within the scope and ambit of those provisions and in other cases, the standard rent determinable under the provisions of sub-s. (1)(B)(2)(b) of s. 6 would constitute the upper limit of the rateable value so far as self-occupied non-residential premises are concerned. The rateable value of the premises, whether residential or non-residential, cannot exceed the standard rent, but, as already pointed out above, it may, in a given case, be less than the standard rent. Second category of premises which are partly self-occupied and partly tenanted the sum total of the rent which the owner may reasonably expect to get from a hypothetical tenant in respect of each distinct and separate unit of occupation calculated in the manner aforesaid, would represent the rateable value of the building. We may point out that this formula for determination of the rateable value would apply, irrespective of whether any of the distinct and separate units of occupation comprised in the building are self-occupied or tenanted. The only difference in the case of a distinct and separate unit of occupation which is tenanted would be that, subject to the upper limit of the standard rent, the actual rent received by the owner would furnish a fairly reliable measure of the rent which the owner may reasonably expect to receive from a hypothetical tenant, unless it can be shown that the actual rent so received is influenced by extra-commercial considerations. Third category of premises where the land on which the premises are constructed is leasehold land with a restriction that the leasehold interest shall not be transferable without the approval of the lessor the assessing authorities would obviously have to estimate for themselves, on the basis of such material as may be gathered by them, the reasonable cost of construction and the market price of the land and arrive at their own determination of the standard rent. This is an exercise with which the assessing authorities are quite familiar and it is not something unusual for them or beyond their competence and capability. It may be noted that even while fixing standard rent under sub-s. (4) of s. 9, the assessing authorities have to rely on such material as may be available with them and determine the standard rent on the basis of such material by a process of estimation. Fourth category of premises where the premises are constructed in stages the rateable value of this category of premises is to be determined when the premises at the first stage of construction are to be assessed for rateable value, the assessing authorities would first have to determine the standard rent of the premises under sub-s. (2)(a) or 2(b) or (1)(A)(2)(b) or (1)(B)(2)(b) of s. 6 as may be applicable and keeping in mind the upper limit fixed by the standard rent and taking into account the various factors discussed above, the assessing authorities would have to determine the rent which the owner of the premises may reasonably expect to get if the premises are let out to a hypothetical tenant and such rent would represent the rateable value of the premises. The basic point to be noted in all these cases is and this is what we have already emphasised earlier that the formula set out in sub-ss. (1)(A)(2)(b) and (1)(B)(2)(b) of s. 6 cannot be applied for determining the standard rent of an addition, as if that addition was the only structure standing on the land.
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