TMI Blog1975 (2) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year is31st March, 1966and the valuation date for 1971-72 assessment years is31st March, 1971. The assessee is an individual. The disputes in the Department s appeal as also in the assessee s cross objections relate to the valuation of House property at 112 Sunder Nagar, New Delhi. The Plot of one land on which this building stands measures 867 sq.yds. and is a corner plot. The plot was taken on lease from Delhi Development Authority by paying a premium of Rs. 24,000. A two and a half storeyed building was construed on this plot of land and the first floor was let out earlier than 31st March, 1958 and the ground floor on 1st May, 1958 to foreign tenants. The first floor with Barsati was let out to Pakistan High Commission on a rent of Rs. 900 per month for a period of two years from31st March, 1958while the ground floor was let out to Ford Foundation w.e.f.1st May, 1958on rent of Rs. 1,050 per month. From 1st may, 1962 to31st July, 1963the rent paid by Pakistan High Commissioner amounted to Rs. 1,050 per month while the Ford Foundation increased the rent to Rs. 1,350 per month w.e.f.1st May, 1961. There was another increase in the rent of the first floor from Rs. 1,050 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as the valuation of land is concerned, the WTO estimated the value of land at the rate of Rs. 200 per Sq. yrd. in place of Rs. 150 per Sq.yd. taken by the Valuer. The WTO also disagreed with the Valuer that deduction at the rate of 50 per cent of the unearned increment in the value of the land liable to be paid to the Govt. should be deducted, because in his opinion, the premium to be paid to the Government would arise only after the sale is completed and this aspect has nothing to do with the determination of the market value of the land under s. 7(1) of the WTA. So, according to the WTO, on the basis of value of land and cost of construction the total value of the property came to Rs. 3,45,346. He found that the annual rental of the property came to Rs. 39,611, which he multiplied by 16 times and arrived at the figure of Rs. 6,33,776. Taking the mean of the two, he arrived at the fair market value of the property at Rs. 4,89,561 on each of the six valuation date under consideration. 4. The AAC who came to her all the six appeals on the same day viz.23rd May, 1973passed a consolidated order for all the six years on23rd May, 1973. The AAC has observed in his impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive clause, we are of the opinion that the AAC was justified in making allowance in this respect. We are supported in this view by the decision of the Delhi High Court in the case of P.N. Sikand vs. CWT 96 ITR 424 (Del) wherein it has been held that 50 per cent of the unearned increase in the value of the land payable to the lessor at the time of transfer has to be deducted in ascertaining the fair market value of the property, whether it was taken as a limitation or restriction attached to the property affecting its value to that extent or as a "debt" owned by the assessee on the valuation date. We, therefore, reject this contention of the Revenue. 6. The next contention of the Departmental Representative, is that as the property was situated in a most posh and aristocratic locality ofNew Delhi, the multiple of 16 applied by the WTO was quite fair and the AAC should not have reduced the same to 14 times while capitalising the net rental income from the property. Mr. Rahendra has in this connection relied on the decision of a full Bench of the Delhi High Court in the case of Diwan Daulat Ram Kapur (1972) Rajdhani Lal Report 166 wherein it has been held by the Delhi High Court th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court of the Rent Controller for reducing the rent but that does not necessarily follow that a prospective buyer of a property contemplated under s. 7(1) of the WT Act would be prepared to pay price on the basis of fancy rent paid by the foreign tenants. Mr. Gauba has, therefore, contended that even if the average of the land and building method and yield method as adopted by the AAC be considered correct, the yield should be taken to be the standard rent which is legally recoverable from the tenants and not the agreed rent paid by the foreign tenants in all the years under consideration. Mr. Gauba has submitted that when this is done, the valuation of Rs. 2,49,000 given by the assessee compares favourably and should have been accepted by the AAC. 7. The Departmental Representative, on the other hand, has contended that agreed rent paid by the tenants is the correct rent as held by full Bench of the Delhi High Court in the case of Dewan Daulu Rai Kapoor referred to above and hence the multiple should have been applied to the actual rent received by the assessee from year to year as has been done by the WTO. In reply to his Mr. Gauba has pointed out that the facts in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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