High Court Of Delhi
K.L. Sondhi vs. Controller Of Estate Duty
Sections ED 36
Arijit Pasayat, C.J. & D.K. Jain, J.
ED Ref. No. 2 of 1982
7th March, 2001
Counsel Appeared
None, for the Petitioner : Sanjiv Khanna with Ajay Jha, for the Respondent
JUDGMENT
ARIJIT PASAYAT, C.J. :
At the instance of the accountable person, the following question has been referred for the opinion of this Court under s. 64(1) of the ED Act, 1953 (in short “the Act”), by the Tribunal, Delhi Bench “B”; “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in taking the view that 50 per cent of the unearned increase in the value of the land payable to the lessor is admissible as a deduction only if a house property is valued by the land and building method and not when it is valued by the rental yield method for the purposes of the Estate Duty Act ?
As the statement of case indicates, the dispute relates to the valuation of a property situated at No. 7, Retendon Road, New Delhi. Though the Assistant Controller of Estate Duty (in short “the Asstt. CED”), and the Appellate Controller of Estate Duty (in short “the ACED”), adopted a particular method for determining valuation of the property in question, the Tribunal held that the proper method would be the rental yield method and not the land and building method. What the Valuation Officer had done, and was accepted by the Revenue was determination of the value of the building on yield basis and addition thereto of land value. The Tribunal was of the view that after working out the value of the building on rental yield basis, there was no necessity for further adding the reversionary value of land. Accordingly, it was held that the value of the land as added was to be excluded and only valuation on the rental yield basis was to be adopted. For coming to such conclusion, the Tribunal held that such valuation governs the valuation both of the land as well as the superstructure. Though a claim was made by the accountable person that from the value of the property 50 per cent deduction should be allowed on unearned increase in the value of the land, the same was not accepted by the Tribunal. On being moved for reference, the question as set out above, has been referred for the opinion of this Court.
We have heard learned counsel for the Revenue. There is no appearance on behalf of the accountable person when the matter is called. We find that the Tribunal after analysing the relevant aspects came to hold that in the case at hand the proper method was rental yield method. It accordingly determined the valuation. Since the valuation has been done on the rental yield basis, the question of land value and/or any increase thereto, more particularly unearned increase in the value is really of no consequence. That being the position, the Tribunal’s conclusions are in order. We answer the question referred in the affirmative, in favour of the Revenue and against the accountable person.
Reference application is disposed of.
[Citation : 254 ITR 604]
