TMI Blog1996 (12) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer included the said hire charges to the gross maintainable rent for arriving at the Net Maintainable Rent (in short, NMR) in order to make the valuation of the property. Aggrieved thereby the assessee preferred his first appeal before the CIT(A) who vide his impugned order repelled the assessee's contention that the hire charges were not includible in the rent inasmuch as the rent was assessed under the head 'Income from house property' whereas the amount of hire charges was assessed under the head 'Income from other sources' in the I.T. proceedings and so the hire charges were not includible in the Gross Maintainable Rent, and confirmed the action of the Assessing Officer in including the hire charges in the Gross Maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tenant. He has therefore assailed the assessment order as also the Ld. CIT(A)'s impugned order confirming the source. As against this, the Ld. D.R. has supported the orders of the authorities below. 5. We have considered consciously the rival contentions as also the materials placed on record. In the present case the assessment year being 1991-92, the valuation of immovable property has, undisputedly to be done in accordance with the provisions of Part B of Schedule III to the W.T. Act. Rule 3 provides for capitalising the net maintainable rent. N.M.R. is defined in rule 4 as the amount of gross maintainable rent reduced by the amount of local tax and 15% of gross maintainable rent. Now it is rule 5 which provides as to how the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have been payable by the owner. In the present appeal we are concerned with item No. (i) of the above Explanation (2). In our opinion, the above Explanation has been added not without a purpose and to give it a meaning the term 'use of the property' is to be considered in a practical sense implying thereby the effective use of the property. The service charges or the charges for amenities provided need be considered in this perspective. Otherwise, for instance, the use of a multi-storeyed building without a lift or without a water pump to store the water in the overhead tank may practically be meaningless though theoretically possible. Besides, these facilities/amenities, undoubtedly contribute to the real worth of the asset. The pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenant. We take for instance a case where the owner is getting Rs. 9,000 as actual rent from the tenant and the tenant is also bearing the expenditure of repairs. In that case, the 'rent received or receivable' will be Rs. 9,000 plus 1/9th thereof equal to Rs. 10,000. It is just the same thing as a tenant paying actual rent of Rs. 10,000, and the owner expending Rs. 1,000 on repairs. The owner may have made a regular arrangement by having assigned the building maintenance/repair work to someone on a regular payment of Rs. 1,000. In this given situation also, the owner though receiving an actual rent of Rs. 10,000 is really getting only Rs. 9,000 in his pocket. As such construing the term in the context of the relevant provisions existing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e valuation of property under Schedule III to the W.T. Act is done for computing wealth-tax leviable on the wealth of the assessee. The wealth, which is taxable under the W.T. Act, is inclusive of movable as well as immovable. Even assuming that the items of property like lift, waterpump, generator, etc., fitted for providing additional facilities to the tenant do not form the house property, still these items will, nevertheless, remain includible in the net wealth of the assessee, differently computed though, the resultant consequence may not, in any way, have any substantial difference. 10. However, we do not mean to opine, with a sweeping stroke, that charges in respect of each and every service/amenity have to be added to the actual r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders of the authorities below, merely refer the amount as being of 'hire charges' without there being available on record any break up thereof and also there being no details specifying the kind of amenity/service to which the charges pertain, we are of the view that the matter needs be restored to the Assessing Officer which we hereby do for verification of the amount of hire charges on the guideline elaborated above and add to the amount of actual rent only that amount of hire charges which is attributable to the service/amenity/facility which the owner is providing by making the additional investment in or in connection with the property, and not those charges, if any, which do not involve incurring of any additional substantial inv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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