The valuation of a house property for probate should be determined using the same method as for estate duty, which is the rental method prescribed under Rule 1-BB of the Wealth Tax Rules, 1957.

JUDGMENT - S.P. BHARUCHA, J.:---The petitioner has filed a petition in this Court for probate of the last will and testament of his father, Dwarkadas Hargovandas Vora, who died on 29th December, 1979. The Petitioner has annexed to the petition a Schedule of the late Dwarkadas's assets. Item No. 21 thereof relates to a 1/2 share in a self-occupied house property at Kallol, Plot No. B-9, Kapole Society, Juhu-Vile-Parle, Bombay-59. It is valued at Rs. 1,64,000/- in the Schedule. This has been found to be an under valuation by the Collector and Superintendent of Stamps, Bombay, who has sent to the Prothonotary and Senior Master a valuation, made by the Assistant Director of Town Planning, Bombay City Survey and Land Records, in the sum of Rs. 3,70,787.00. This valuation has been made on the land-plus-building method. The petitioner having field his objection, an enquiry has to be held under the provisions of section 28(5) of the Bombay Court Fees Act, 1959.

2. Ordinarily, the matter would forthwith have been referred to the Prothonotary and Senior Master for holding the enquiry. Mr. Seervai, learned Counsel for the petitioner, has, however, contended that a question of principle should first be decided by the Court, namely, whether the property should be valued on the basis of the rental method as suggested by him or the land and building method as suggested by the Superintendent of Stamps.

3. The other half-share in the property is owned by the petitioner. The property consists of a bungalow of a ground and one upper floor. There is unutilised surplus land surrounding it measuring 454 Sq. Yds.

4. I do not reproduce Mr. Seervai's arguments in any detail for I am satisfied that one arguments is unanswerable.

5. The Wealth Tax Act imposes a tax upon a man's wealth while he lives. The Estate Duty Act imposes a tax upon a man's wealth at the time he dies. Under section 7 of the Wealth Tax Act "the value of any asset .........shall be estimated to be the price which in the opinion of the Wealth Tax Officer it would fetch if sold in the open market on the valuation date." Under section 36 of the Estate Duty Act "the principle value of any property shall be estimated to be the price which, in the opinion of the Controller, it would fetch if sold in the open market at the time of the deceased's death". The emphasis which I have supplied shows the basis of the valuations to be the same.

6. Under section 46 of the Wealth Tax Act the Central Board of Direct Taxes is empowered to "make Rules for carrying out the purposes of this Act." In respect of the valuation of a house Rule 1-BB of the Wealth Tax Rules, 1957, is made. Clause 1 states that for the purposes of section 7(1) 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 100/8.

(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.

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7. Clause 2 defines "gross maintainable rent" in relation to a house to mean "the sum for which the house might reasonably be expected to let from year to year." "House" includes an independent residential unit. "Net maintainable rent" in relation to a house means the amount of the gross maintainable rent reduced as therein stated in respect of local tax, repairs, rent collection, insurance premia, ground rent and land revenue. Clause 3 provides that where the inbuilt area of the plot of land on which the house is built exceeds the specified area, the value of the house arrived at in accordance with the provisions of sub-rule (1) shall be increased by the percentages therein stated. 'Specified area' in regard to a house situated in Bombay is stated to mean sixty per cent of the aggregate area.

8. There are no such Rules for the Esta

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