1 mpt IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2956 OF 1990 Rajendra Ambalal Shah .. Petitioner versus C.P. Dikshit & ors. .. Respondents ... Mr. H. Toor i/b Crawford Bailey for the petitioner. Mr. P.S. Sahadevan for the respondents. CORAM : F. I. REBELLO AND D.G. KARNIK, JJ DATED : 10th August 2009 P.C:- 1. For the order to be passed, it is not necessary to set out the facts in detail. The petitioners have moved this court being aggrieved by the valuation done by the Valuation Officer. This valuation in terms of section 16A(6) of the Wealth Tax Act is binding on the Assessing Officer. When the petition was admitted, interim relief was granted. 2. In so far as valuation is concerned, the same is by Rule 1 BB of Wealth Tax Rules which read as under:- 2 Rule 1BB “For the purpose of sub-section (1) of Section 7, the value of a house which is wholly or mainly used for residential purposes shall be the aggregate of the following amounts, namely- (a) the amount arrived at by multiplying the net maintainable rent in respect of the part of the house used for residential purposes by the fraction 100/81 and (b) the amount arrived at by multiplying the net maintainable rent in respect of the remaining part of the house, if any, by the fraction 100/9; Provided that in relation to a house which is built on leasehold land, this sub-rule shall have effect as if for the fraction 100/8 in clause(a) or as the case may be, the fraction 100/9 in clause (b), the fractions 100/9 and 100/10 respectively, had been substituted. Explanation: for the purpose of this sub-rule, a house shall be deemed to be mainly used for residential purposes, if the built up floor area thereof used for residential purposes is not less than sixty-six and two-third percent of its total built-up floor area. (2) For the purposes of this rule - (a) “gross maintainable rent”, in relation to a house means - 3 (i) the sum for which the house might reasonably be expected to let from year to year; or (ii) where the house is 1st and the annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in sub- clause (i), the amount to received or receivable; Provided that where the house is in the occupation of a tenant and the taxes levied by any local authority or any expenditure on repairs in respect of the house is borne wholly or partly by the tenant, the sum referred to in sub-clause (i) or, as the case may be, the annual rent referred to in sub-clause(ii) shall be increased by the amount of the taxes or, as the case may be, the expenditure on repairs so borne by the tenant. Explanation: For the purposes of this clause, “annual rent” means - (a) in a case where the property is 1st throughout the previous year, the actual rent received or receivable by the owner in respect of such years and (b) in any other case, the amount which bears the same proportion to the amount of the actual rent received or receivable by the owner for the period for which the property is let, as the period of twelve months bears to such period.” 4 3. In the instant case, admittedly, we find that the Valuation Officer has valued the property based on what is known as land and building method. A plain an/or literal reading of the rule would require the valuation officer to value the property in terms of multiplying the net rent and following the other provisions. This has not been done. 4. Our attention is invited to a judgement of this court in Jehangir Mahomedali Chagla & Anr. Vs. M.V. Subrahmanian, Addl. First Controller of Estate Duty and ors, (1985) 155 ITR 637 (Bom) where the Single Judge has noted that the method provided under Rule 1BB has to be followed which is the annual value or rental method. That cannot be the basic core of Rule 1BB. We are in respectful agreement with the view taken by the learned Single Judge. 5. For the aforesaid reasons, the order of valuation done by the valuation officer is set aside. The Valuation Officer is directed to revalue the property in terms of what is stated above. The entire exercise to be completed within 12 weeks from today. 6. Rule made absolute accordingly. There shall be no order as to costs. (D.G. KARNIK, J) (F.I. REBELLO, J)