TMI Blog1988 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... as very low and called upon the assessee to produce the revenue records and a copy of the statement filed under rule 3 of the Stamp Rules. That was not done. The assessee did not give any reply to the letter of the Gift-tax Officer dated December 15, 1975, requiring him to specify his objections to adopt the market value at Rs. 1,50,000. The Gift-tax Officer found that the prevailing market rate in the area in which the property is situated during the relevant period ranged between Rs. 16,000 and Rs. 18,000 per ground. As regards the building, the Gift-tax Officer found on detailed enquiry that it is centrally situated in the land and it has R.C.C. roof, teak wood doors and panelling and windows fitted with frames and glass. It was also fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer and confirmed the value fixed by him. On further appeal by the assessee to the Tribunal, it was held that the method of valuation adopted by the Gift-tax Officer was proper in the present case. The Tribunal expressed its inability to accept the contention of the assessee that the capitalisation method was the only appropriate method for valuing the property in question. The reason given by the Tribunal is that though the property is stated to be on lease and the tenant is stated to be entitled to the benefits of the Rent Control Act, the data relating to the tenancy is inadequate. The Tribunal held that in the absence of data regarding the tenure of the lease, the contention of the assessee that the actual rent received should be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (7) of the gift deed which recites that possession of the property gifted is handed over to the donee by getting a letter of attornment from the tenant proves that the entire property is in the occupation of the tenant. Learned counsel proceeds to contend that the actual rent received by the assessee, viz., Rs. 400 per mensem, should be taken to be the basis for capitalisation in the absence of any other circumstance or material being placed by the Revenue for not accepting it as the rent receivable for the property. At one stage of the arguments, learned counsel for the assessee contended that the building was non-residential in character and the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, were applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had, in proceedings under the Wealth-tax Act, agreed to valuation of Rs. 90,000 for the same property though in the return of gift he had admitted only a sum of Rs. 75,000 as the value of the property. Learned counsel submitted that if the contention of the assessee that valuation should be made by capitalisation of rent is accepted, it should be only on the basis of standard or fair rent as per the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act. It is the contention of learned counsel for the Revenue that the necessary materials for the ascertainment of such fair rent under the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act not being available on record as at present, the Tribunal should be directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the value of the building has been fixed at Rs. 27,000. By doing so, the Tribunal has overlooked a relevant and important matter to be taken into account before fixing the value of the property. There is no dispute that a tenant is occupying the building. Whether he is a tenant of the building only or of the building and the land together, the fact that he is in occupation of the building is sufficient to detract any purchaser from, paying the full value thereof if it is sold in the open market. It is common knowledge that it is very difficult to dislodge a tenant and take vacant possession of the property. Undoubtedly, the property occupied by a tenant will not fetch the same value as a vacant property, even though similar in every othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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