M.KATJU, J. - (1.) THIS appeal has been filed against the order dt. 12th June, 2000, of the Tribunal, Delhi Bench C, New Delhi.
(2.) WE have heard learned counsel for the parties and find no merit in this appeal. The relevant assessment year is 1993 94. The question involved is about the valuation of the property in question being a residential flat at Roopam Building, 18, Worli Estate Scheme No. 52, Abdul Gaffar Road, Worli, Bombay, which is owned by the assessee and used as a guest house. During the assessment proceedings, the AO noted that the assessee had shown the value of the above property at Rs. 1,55,139 on the valuation dt. 31st March, 1993. The AO made a reference to the Valuation Officer who valued the building at Rs. 2,60,73,000. The AO called upon the assessee to explain why the valuation of the property be not taken as per the valuation report. The assessee replied that the valuation has to be done under S. 7(1) of the WT Act, 1957, in accordance with the r. 3 to 8 of Sch. III to the Act.
(3.) RULE 3 states : "3. Subject to the provisions of rr. 4, 5, 6, 7 and 8, for the purposes of sub s. (1) of S. 7, the value of any immovable property, being a building or land, appurtenant thereto, or part thereof, shall be the amount arrived at by multiplying the net maintainable rent by the figure 12.5 : Provided that in relation to any such property which is constructed on leasehold land, this rule shall have effect as if for the figure 12.5, (a) where the unexpired period of the lease of such land is fifty years or more, the figure 10.0 had been substituted ; and (b) where the unexpired period of the lease of such land is less than fifty years, the figure 8.0 had been substituted : Provided further that where such property is acquired or construction of which is completed after 31st March, 1974, if the value so arrived at is lower than the cost of acquisition or the cost of construction, as increased, in either case, by the cost of any improvement to the property, the cost of acquisition or, as the case may be, the cost of construction, as so increased, shall be taken to be the value of the property under this rule." Rule 4 states : "For the purposes of r. 3, 'net maintainable rent' in relation to an immovable property referred to in that rule, shall be the amount of gross maintainable rent as reduced by (i) the amount of taxes levied by any local authority in respect of the property ; and (ii) a sum equal to fifteen per cent, of the gross maintainable rent." Rule 5 states : "For the purposes of r. 4, 'gross maintainable rent', in relation to any immovable property referred to in r. 3, means (i) where the property is let, the amount received or receivable by the owner as annual rent or the annual value assessed by the local authority in whose area the property is situated for the purposes of levy of property tax or any other tax on the basis of such assessment, whichever is higher; (ii) where the property is not let, the amount of annual rent assessed by the local authority in whose area the property is situated for the purpose of levy of property tax or any other tax on the basis of such assessment, or, if there is no such assessment or the property is situated outside the area of any local authority the amount which the owner can reasonably be expected to receive as annual rent had such property been let." Rule 8 states : "Nothing contained in r. 3 shall apply, (a) where, having regard to the facts and circumstances of the case, the AO, with the previous approval of the Dy. CIT, is of opinion that it is not practicable to apply the provisions of the said rule to such a case ; or (b) where the difference between the unbuilt area and the specified area exceeds twenty per cent, of the aggregate area ; or (c) where the property is constructed on leasehold land and the lease expires within a period not exceeding fifteen years from the relevant valuation date and the deed of lease does not give an option to the lessee for the renewal of the lease, and in any case referred to in cl. (a) or cl. (b) or cl. (c), the value of the property shall be determined in the manner laid down in r. 20." ;