* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1153/2003
Date of Decision:29th March, 2012
IN THE MATTER OF:
NEW DELHI MUNICIPAL COUNCIL ..... Petitioner
Through: Mr. Prashanto Chandra Sen, Adv.
with Ms.Anchal Yadav, Adv.
versus
LATE MRS. AMTESHWAR ANAND (THR. L.Rs.) AND ORS
..... Respondents
Through: Mr. T.S. Chaudhary, Adv.
CORAM:
HON'BLE MS. JUSTICE HIMA KOHLI : HIMA KOHLI,J (Oral)
1. The petitioner/NDMC has challenged an order dated 19.03.2002 passed by the learned ADJ, Delhi in House Tax Appeal No.81/2001 entitled 'Smt. Amteshwar Anand & Anr. Vs. NDMC'. By the aforesaid common judgment and order, the two appeals preferred by the respondent/assessees were partly allowed and disposed of. However, the petitioner/NDMC is aggrieved by the decision taken by the learned ADJ in HTA No.81/2001 whereunder the assessment order dated 13.02.2001 in respect of Flat No.9, Khan Market, New Delhi, for the assessment years 2000-2001 and 2001-2002 was partly modified by excluding a sum of `26,600/- towards the provision of services of W.P.(C) No.1153/2003 Page 1 of 8 watchman and painter and other related workmen under an Amenity Agreement executed between the assessees and the tenant, which amount was added by the Department while determining the rateable value of the flat.
2. Briefly stated, the facts of the case are that the flat in question had been let out by the respondents/assessees. For the assessment years 1996-97 and 1997-98, the petitioner/NDMC proposed to increase the then existing rateable value from `982/- less 10% to `3,05,263/- less 10% on market rent basis. The aforesaid increase was proposed on account of the additional construction and alteration noticed in the flat by the petitioner/NDMC on 01.02.1997. Accordingly, a notice dated 5.2.1997 was issued to the assessees/owners by the petitioner/NDMC under Section 77 of the NDMC Act, 1994. As no reply to the said notice was received by the petitioner, a notice under Section 72(2) of the said Act was issued to the owners/occupiers on 27.03.1997 inviting objections.
3. A declaration dated 02.02.1999 came to be filed by the owners of the subject flat declaring inter alia that the subject flat was fetching rent of `97,560/- per month. Based on the aforesaid declaration, the petitioner/NDMC issued notice dated 19.3.1999 under Section 72(2) of the Act proposing to increase the existing rateable value to `11,70,720/- less 10% on actual rent basis. As no objection was W.P.(C) No.1153/2003 Page 2 of 8 received by the NDMC to the aforesaid proposal, the assessment order dated 24.08.1999 was passed by the assessing authority fixing the rateable value of the subject flat at `3,05,263/- less 10% for the assessment years 1996-97 and 1997-98 and at `11,70,720/- less 10% for the assessment years 1998-99 and 1999-2000 on actual rent basis.
4. On 08.09.1999, the petitioner/NDMC received a letter from the assessees stating inter alia that they did not receive any notice from the petitioner proposing to increase the rateable value of the subject flat. It was, therefore, requested that the subject flat be re-assessed and for which purpose, they handed over copies of two lease deeds executed by the respondents with two companies, namely, M/s Jardin Insurance Consultants Ltd. and M/s Registan Pvt. Ltd. Thereafter, the petitioner/NDMC issued notice dated 29.02.2000 under section 72 of the NDMC Act for the assessment year 1999-2000 and 2000-2001 proposing to amend the rateable value of the subject flat from the then existing rateable value at `11,70,720/- less 10% to `12,92,820/- less 10% for the assessment year 1999-2000 and at `13,17,240/- less 10% for the assessment year 2000-2001, on the basis of the actual rent.
5. Objections to the aforesaid proposal were received by the petitioner/NDMC from the respondents/assessees on 09.03.2000 W.P.(C) No.1153/2003 Page 3 of 8 wherein it was stated that after the subject flat was vacated by the previous tenant, M/s Jardin Consultants Ltd. on 08.05.1999, the same had been let out to M/s Registan Pvt. Ltd. w.e.f. 01.06.1999 on a monthly rent of `73,170/-. Taking into consideration the aforesaid rent received by the assessees, vide the impugned assessment order dated 13.02.2001, the petitioner/NDMC increased the reateable value of the subject flat to `11,85,500/- w.e.f. 01.06.1999.
6. Aggrieved by the aforesaid assessment order, the respondents/assessees filed an appeal before the learned ADJ, Delhi stating inter alia that the subject flat had been given on rent to M/s. Registan Pvt. Ltd. w.e.f. 1.6.1999 on a monthly rent of `73,170/- by virtue of a lease deed dated 25.05.1999. It was stated that in addition to the aforesaid rent, the assessees had also executed an Amenity Agreement dated 25.05.1999 whereunder the tenant was paying a sum of `36,600/- to the respondents/assessees on account of fittings, furniture, fixtures and for providing services of chowkidars, painters, etc.
7. The stand of the respondents/assessees before the learned ADJ was that the petitioner/NDMC could not have added the aforesaid sum of `36,600/- in the rent for determining the rateable value of the subject flat. On the other hand, counsel for the petitioner/NDMC (respondent before the court below) had urged that the entire sum of W.P.(C) No.1153/2003 Page 4 of 8 `36,600/- received by the assessees on account of fittings and fixtures and for providing services of chowkidars, security and painters, etc. had to be added to the monthly rent and upon doing so, a total sum of `1,09,770/- was to be considered as the monthly rent for purposes of determining the rateable value of the subject flat.
8. After hearing the parties, the trial Court perused the copies of the Amenities Agreement as also the lease agreement and observed that whereas, the lease agreement was executed between the assessees and the tenant for letting out the subject flat, the Amenities Agreement had been executed between Rajdhani General Traders Pvt. Ltd. and the tenant for providing services like security, chowkidars, painters etc. and a monthly payment towards the said services was fixed at `26,600/- to be paid to the Company. A separate lease agreement for the fittings and fixtures was executed with the tenant by a partnership firm, by the name of M/s AVA, of which the respondent No.1/assessee was a partner and it was agreed inter alia that the tenant would pay a monthly sum of `10,000/- to the partnership firm towards the fittings and fixtures.
9. Upon perusing the aforesaid agreements, the learned ADJ had observed that the respondents herein were to provide services of watchman, painters and other related workmen for the upkeep of the premises and the said services could not be included in the rent W.P.(C) No.1153/2003 Page 5 of 8 component and could not have been taken into consideration for ascertaining the rateable value of the subject flat. However, the agreement relating to fittings and fixtures installed in the subject flat was considered as a part of the rent and, therefore, it was held that only a sum of `10,000/- could have been included by the petitioner/NDMC for determining the rateable value of the subject flat. Holding so, the impugned assessment order dated 13.02.2001 was partly set aside and w.e.f. 01.06.1999, the enhanced rent was fixed at `83,170/- (i.e. `73,170 + `10,000/-)
10. This Court has examined the impugned order and perused the documents placed on record. The contentions of the learned counsel for the petitioner/NDMC that as the aforesaid two agreements were executed on the same day as the lease agreement, the amounts payable by the tenant under all the three agreements ought to have been clubbed with rent more so when one of the Directors of the Pvt. Ltd. Company was the respondent No.1/assessee herself. It is submitted that the aforesaid two agreements and the rent agreement were bifurcated and executed separately to circumvent the payment of house tax and since all the three agreements were to run concurrently, the petitioner/NDMC was entitled to club the proceeds received from the lease agreement along with the other two agreements towards fittings and fixtures and services entered into between the parties to W.P.(C) No.1153/2003 Page 6 of 8 determine the rateable value of the subject flat.
11. The aforesaid submission made on behalf of the petitioner/NDMC is untenable inasmuch as the amounts charged by the Company under the Amenities Agreement executed with the tenant was in its capacity as an independent legal entity. The said amounts were claimed on account of rendering services like offering security personnel, chowkidars and other workers to the tenant and the said services could, by no stretch of imagination be termed as a part of the rentals received by the respondents/assesses. Therefore, the learned ADJ was justified in excluding the said amounts received in terms of the said agreement executed between the Company and the tenant from the rent component required to be taken into consideration by the petitioner/NDMC for assessment of the rateable value of the subject flat. As regards the agreement executed by the partnership firm with the tenant for receiving a sum of `10,000/- per month on account of fittings and fixtures etc. installed in the flat, learned counsel for the respondents states that this aspect had not been challenged by the assesses before the court below and that they had accepted the decision of the assessing authority to club the aforesaid amount with the rent of `73,170/- received with respect to the subject flat.
12. In view of the above discussion, this Court does not find any illegality, arbitrariness or perversity in the impugned order dated W.P.(C) No.1153/2003 Page 7 of 8 19.03.2002 passed by the learned ADJ under which order, the assessment order dated 13.02.2001 passed by the petitioner/NDMC has been modified to the extent as indicated in para-7 of the impugned order.
13. The petition is, accordingly, dismissed while leaving the parties to bear their own costs.
HIMA KOHLI, J MARCH 29, 2012 'anb' W.P.(C) No.1153/2003 Page 8 of 8