TMI Blog1991 (3) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... irection be issued to respondent No. 1 not to proceed with the determination of the wealth of the petitioner on the basis of and in accordance with the said letters/notices. The matter arises under the wealth-tax assessment proceedings relating to the assessment year 1987-88 for which the relevant valuation date is said to be March 31, 1987. The petitioner was a partner in a partnership firm, Juggilal Kamlapat Bankers, till March 18, 1987. The said firm was dissolved with effect from March 19, 1987, under a deed of dissolution dated March 26, 1987. The assets of the partnership were distributed among the various partners. The petitioner got a 1/9th share and, in lieu thereof, certain properties including certain house properties were allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment well. Please submit your reply by February 25, 1991." To this, the petitioner replied stating that the valuation of the partners' interest in the said firm for the previous years has been challenged by the petitioner, among others, in several High Courts by way of writ petitions which are pending disposal in those courts. In any event, said the petitioner, since, on the valuation date relevant to the assessment year 1987-88, the said firm was not existing and because the properties have become the separate properties of the petitioner-assessee, they must be valued in accordance with Schedule III to the Wealth-tax Act. The petitioner submitted that though introduced by the 1989 Amendment Act with effect from April 1, 1989, the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years. He submits that, prior to the said amendment Act, immovable properties had to be valued in accordance with rules framed by the Central Board of Direct Taxes under section 46 of the Act. Rule 1 BB of the said rules prescribed the method to be followed in valuing house properties, both let to tenants and those occupied by the owner himself. The said rules have been omitted by the said amendment Act, which has introduced a more elaborate and qualitatively different rule in Schedule III to the Act itself. Section 7 is also recast. Since section 7 and the said rules constitute machinery provisions and are procedural in nature, they apply to pending proceedings as well. But the Assistant Commissioner has taken the view that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a specified multiple of the net maintainable rent. The rule defined the expressions "gross maintainable rent", "annual rent" and "net maintainable rent". "Gross maintainable rent" was defined as the sum for which the house might reasonably be expected to be let from year to year and, where it is let, the annual rent actually received or receivable. "Net maintainable rent" was defined as gross maintainable rent as reduced by the amount of taxes and 1/6th amount towards repairs and certain other specified expenses. What it is relevant to notice is that, in the case of house occupied by the owner himself, the wealth-tax authority had to determine the probable rent which the building would receive, if let, and determined the net maintainable r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Wealth-tax Officer need not determine the probable rent himself, but must adopt the annual rent assessed by the local authority for the purpose of determining the property tax, as the basis. It would immediately be seen that this difference is not a substantial one. Whereas the local authority levies property tax on the basis of the annual rental value, it also determines the probable rent in the case of a house not let out but occupied by the owner. Parliament evidently thought that since the local authority has already done the said exercise, it could be adopted as the basis by the Wealth-tax Officer and that the latter need not determine the probable rent by himself. The new rule merely dispenses with a second exercise by the Wealth-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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