2001 PLP 1230 (PTD)

On appeal, the Appellate Assistant Commissioner deleted the reversionary value of the land in the computation made by the Valuation Officer thus, reducing the value of the properties. The Commissioner directed that the value of Alexandra House be accepted as Rs. 80,000, the value of the Cash Bazar, property as Rs. 3,38,300 and the value of the property Liberty Theatre as Rs. 3,79,

700. With reference to the Band Line property, he directed the Wealth Tax Officer to re-compute the value of the land which was separately assessed after allowing deduction of 10 percent for joint ownership and a reduction of Rs. 10,000 for inability to evict the tenants. The Revenue preferred appeals before the Tribunal as against the order of the Appellate Assistant Commissioner. The Tribunal did not interfere with the order of the appellate authority in respect of Alexandra House, the Band Line property and Liberty Theatre, but the Appellate Tribunal enhanced the value of the Cash Bazar property only and accordingly confirmed the order of the Appellate Assistant Commissioner in respect of valuation of other properties except the Cash Bazar property. On this the reference has arisen at the instance of the Revenue and the following question has been referred to this Court for our opinion: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that no addition on account of reversionary value of the lands was warranted?" Learned counsel for the Revenue submitted that the Appellate Assistant Commissioner was in error in deleting the reversionary value of the land and the superstructures were not really valuable and the land is more valuable and the land and building would give a better valuation of the properties and even in respect of Liberty Theatre, there was no question of deleting the land value because there was no capitalisation of rent which could be deemed to be included in the value of the land. Counsel for the assessees submitted that the proper method of valuation was the capitalisation of rent and the value determined by the Appellate Assistant Commissioner should be upheld. He further submitted that since the value was determined by adopting the rental method, there was no justification in valuing the land and the order of the Appellate Assistant Commissioner is sustainable. The Wealth Tax Officer had added the reversionary value of the land which was not accepted by the Appellate Assistant Commissioner. The Commissioner has followed the decision of the Calcutta High Court in CIT v. Anup Kumar Kapoor (1980) 125 ITR 684 and has taken the view that there is no justification in adding the revisionary value of the land as the value of the property has been determined by adopting the rental method. The Tribunal confirmed the order of the Appellate Assistant Commissioner in respect of the valuation of other properties except the value of the Cash Bazar property. With regard to the Cash Bazar property, the finding of the Tribunal is that the capitalisation of rent of about Rs. 50,000 by 12 times yields a value of about Rs. 6 lakhs in the place of Rs. 3,38,300 taken by the Appellate Assistant Commissioner. Accordingly, the Tribunal enhanced the value of the Cash Bazar property basing upon capitalisation of rent. The Tribunal was perfectly justified in arriving at the value of the Bazar property on the basis of capitalisation of rent. In CIT v. Anup Kumar Kapoor (1980) 125 ITR 684, it has been held by the Calcutta High Court that (headnote): "The value of the land cannot be taken twice, once in arriving at the figure by the yield or rental method and again in applying the value of an imaginary future reversionary value of the land. " We concur with the view taken by the Calcutta High Court and we are of the view that the yield or rental method of valuation is proper and the value cannot be enhanced by adding the reversionary value of the land. The Wealth Tax Officer was not justified in adding the reversionary value of the land. Hence, we find no error in the order passed by the Tribunal. The value of the land cannot be enhanced by adding the reversionary value of the land. We answer the question referred to this Court in favour of the assessee and against the Revenue. No costs. M.B.A./460/FC Reference answered.