The main legal point established in the judgment is the justification for adopting the land and building method for valuing a self-occupied property under the W.T. Act, based on well-settled principles of valuation and specific circumstances of the case.

Rama Jois, J.—Whether the market value of a residential building under self-occupation of the owner-assesses for purposes of levying wealth-tax under the W.T. Act should have been ascertained under capitalisation of annual rental value method, and not by adopting the land and building method, is the precise question of law arising for consideration in these two references made by the Income Tax Appellate Tribunal, in respect of the assessment years 1970-71 and 1971-72, pertaining to the same assessee under s. 26(1) of the W.T. Act hereinafter referred to as "the Act").

2. The assessee owns several house properties in the City of Bangalore. One of them is occupied by the assessee. It is No.5, Richmond Road, Bangalore. The area of the site is 23,280 square feet. The built area is 3,845 square feet. For the five assessment years, 1965-66 to 1969-70, the assessee had furnished a report from a registered valuer as to the valuation of that property. The value of the building was given at Rs. 83,907. The valuer valued the site at qf Rs. 5.25 per square feet. But he had taken into account only the actual built area. The WTO accepted the valuation of the building and also the rate per square feet for the site. He, however found no justification to exclude the unbuilt area of the site. Taking the valuation of unbuilt area also he assessed the market value of the building at Rs. 2,06,127. The assessment for the five years was finalised together. On appeal by the assessee, this valuation was confirmed by the AAC. This order was not challenged further by the assessee. For the assessment year 1970-71 the assessee furnished the value of the building at Rs. 1,00,000 and submitted that capitalisation of annual rental value method was applicable even to the self-occupied house in view of the decision of this court in Commissioner of Wealth-tax, Mysore Vs. V.C. Ramachandran, ILR (1966) KAR 270, in which case, the assessee himself was the party. Similarly, for the assessment year 1971-72 also, the assessee furnished valuation of the building at Rs. 1,00,000 but furnished the annual rental value at Rs. 2,500. For both the assessment years, the WTO held that the value of the building as fixed by the AAC for the previous five assessment years should be adopted and assessed the tax accordingly. The assessee preferred appeals before the AAC. On the wrong assumption that capitalisation of annual rental value method had been adopted for the earlier five assessment years, he directed that the same method should be adopted for the assessment years 1970-71 and 1971-72 also. The WTO preferred appeals against these orders to the Income Tax Appellate Tribunal. The Tribunal, by a common order, allowed the appeals holding that the adoption of the land and building method was justified on the facts and in the circumstances of the case and rejected the plea of the assessee that the market value should have been ascertained only by capitalisation of the rental value method. Thereafter, at the instance of the assessee, the following question of law is referred for our opinion

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the valuation of the self-occupied property was correctly made by the Income Tax Officer on the land and building method ?"

3. Though the wording of the question indicates that the assesee questioning the correctness of the market value of the building as ascertained by the land and building method, the real controversy between the assessee and the revenue is as to the correctness of adopting the land and building method of valuation to the self-occupied house instead of capitalisation of annual rental value method as pleaded by the assessee. Therefore, we proceed to answer the reference, taking the real controversy, between the assessee and the revenue into consideration.

4. Sri A. N. Jayaram, learned counsel for the assessee, submitted that the revenue should have ascertained th