New Delhi Municipal Council vs Late Mrs. Amteshwar Anand (Thr. ...
2012 Latest Caselaw 2153 Del

*     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

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

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

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

`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

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

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

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'