V.S. Deshpande, J.
1. These two appeals arise out of the judgment of the Chief Judge of the Small Causes Court, Bombay, dated March 30, 1970, in an appeal by the assessee under Section 217 of the Bombay Municipal Corporation Act, hereinafter referred to as 'the Act'. The Hindustan Lever Limited, hereinafter referred to as 'the assessee', completed construction of a building on two plots bearing Nos. 165 and 166 in the month of June, 1963. The two plots were earlier rated for the purposes of municipal assessment at Rs. 59,715. After the construction, a notice was issued by the Corporation to the assessee to show cause why the rateable value should not be raised to Rs. 17,36,420 with effect from June 16, 1963. On March 3, 1964 the assessee complained against the proposed enhancement. The said complaint was tried and finally disposed of by the Corporation on August 21, 1964, fixing the rateable value at Rs. 12,16,285 by adopting the comparative method. This assessment was challenged in appeal to the Chief Judge .under Section 217 of the Act.
2. Before the learned Judge the assessee insisted that the comparative method of assessment adopted by the Corporation was not and contractor's method alone was suitable for the assessment of the said building. It appears that in fact the learned Judge heard the parties on this question as a preliminary question and held that firstly, it was for the Corporation to choose, in the first instance, the method to be employed for arriving at the rateable value and secondly, that the onus lay on the assessee to show that the method followed by the Corporation was not the suitable method. We are informed that a detailed order was passed by the learned Judge in this behalf. However, we have not had the benefit of perusal of the said order. From the tenor of the judgment it appears that, according to the Corporation, the comparative method was the most appropriate method for fixing the rateable value of the building in question; whereas, according to the assessee, the contractor's method was the only suitable method for the building in question. Incipit of the above position, at the later stage, that is to say, at the time of the trial, when evidence was led, the learned Judge did allow the parties to lead the requisite evidence for assessment, according to the contractor's method as well presumably for the benefit of the appeal Court. The parties then led the evidence as to the cost of construction. The assessee examined in all eleven witnesses, to prove the bills indicating costs of various items of construction, and payments made by the assessee to them in respect of those bills. A to S. Eleven witnesses included their architect Janardhan Bodhe, who prepared plan of the construction exh. Q and supervised the construction and installations. He also proved his bills paid to him at the rate of 4 per cent. of the construction costs.
3. The Corporation examined four witnesses, viz. Kashiram, Amrutram Mahadik, ward inspector, Dinesh Ramchandra Padhye, architect, Asstt., A.O. Jairzbhoy and Co., Purshottam Vasudeo Sathc, supervising surveyor, and Roshanal Hasanali Namavati, architect and valuer.
4. On this evidence, the learned Chief Judge firstly held that comparative method was not proved to be unsuitable. He, secondly, held that even if he were to adopt the contractor's method, the result would not have been different in any manner. In the process of calculating as per the contractor's method, the learned Chief Judge rejected the assessee's contentions against the inclusion of the costs, of partitions, and false ceilings, and mural paintings, etc., but accepted their contention as to the exclusion of the costs of the air-conditioning machinery. He also found that the rental value of the building without such air-conditioning; was lesser than the building in which such amenities were made available. In this view of the matter, he reduced the rateable value to Rs. 9,97,555 from Rs. 12,16,285 fixed by the Corporation.
5. The Corporation and the assessee have challenged the findings of the learned Chief Judge in their respective appeals to the extent to which the findings are recorded against them.
6. The first question is about the suitability of the comparative method for fixation of rateable value of the building in question. Admittedly the building is occupied by the owner. In fact, its structure is planned and designed to suit the owner's need and no portion of it is let out to any one. Thus this is a case in which evidence of actual rent of the building itself cannot be available. The annual rateable value of the building can be fixed under the comparative method by reference to the rents of some other buildings of the area comparable in all respect with the building in question. The Corporation relied on the annual rents of six such buildings. The learned Judge, however, firstly, found that there were, at any rate, four comparable buildings in the same area; and secondly, that the rents paid by the tenants of these buildings did furnish good basis for fixing annual rateable value of the disputed building. This was obviously on the assumption that the material produced before him did show what the actual rent was paid by the tenants in respect of the portions of these four buildings occupied by them.
7. Mr. Abhyankar, the learned advocate for the assessee, challenged the existence of any such material and contended that the Corporation has not proved what actual rent tenants in these four buildings paid for the portions occupied by them. Now, none of these tenants are examined in the Court nor the owners or their managers or rent collectors. Mr. V.T. Walawalkar, the learned advocate appearing for the Corporation, contended that the material to that effect collected by the inspectors of the Corporation in compliance with the requisitions made by the Commissioner under Section 156 of the Act did include the information as to such actual rents and measurements of the areas occupied by such tenants.
8. This made it necessary to examine the material. The ward inspector Mahadik was examined to prove the entries in the inspecting registers, while Sathe, the supervising surveyor of the Assessment Department of the Corporation, was examined to prove measurements taken by him. Exhibits B-6 to B-10 are the extracts of the inspection register. Exhibits 18 to 21 are extracts of the measurements. Exhibit 23 is the extract of the complaint register in respect of these four buildings, while exh. 22 are the extracts of their assessments for the relevant years. The figures in extracts exh. B-6 to B-10 do not themselves indicate that they represent the actual rents paid by the tenants. Evidence of Sathe shows that entries in the inspection registers are made from the field-books in which the inspectors make notes, on the spot, about the information collected from the tenants as to what rent they paid for the portions occupied by them; in a particular building. The field books were not admitted in evidence as their production was opposed by the assessee. Before reviewing the question of their admissibility it was necessary to verify if the field books contain any entries as to the actual rent at all. In reply to our pointed question to this effect, Mr. Walawalkar was constrained to admit that the entries do not show what actual rent was paid by the tenants of these four buildings. After examining the said entries and consulting the concerned officers present in the Court, Mr. Walawalkar made a statement at the Bar that the said entries merely indicate the inspector's estimate of such rent and not the actual rent paid by the tenant to the owner. It was contended that the entries in the existing inspection registers are merely copies of such estimates taken out from the field books. This goes clearly to show that the material relied on by the Corporation did not include the evidence as to what actual rent is paid by any tenant for any portion in any of the four buildings. Evidence of Namavati, apart from being too general, cannot be relied on in the absence of direct evidence of tenants or landlords or extracts of the municipal records. The learned Chief Judge has, no doubt, referred in his judgment to these documents and 'letting rates' indicated therein, as if this material indicates as to what actual rent is paid by the tenant. The statement made by Mr. Walawalkar at the Bar shows how this impression of the learned Judge is ill-founded.
9. The question then is whether any such mere estimates of the inspector, even if held to be bonafide, can furnish any evidence of the actual rental income of the four buildings, which are found to be otherwise comparable with the building under consideration. The passage quoted by the learned Judge from p. 437 of Ryde on Rating (eleventh edn.) shows as if the assessment of comparable buildings also can be relied on. The quotation runs thus :
Cost or capital value can only be referred to in the absence of the best evidence, namely that of actual rents, and even in cases where there are no actual rents, the evidence afforded by receipts and expenditure or by the assessments of comparable hereditaments will often be a better guide to the hypothetical rent than cost.
Difficulty, however, is that these estimates of rent of any premises, as distinct from the contractual actual rent, cannot furnish any guide-line to its standard rent. The Corporation, however, cannot fix the rateable value of any building in disregard of the standard rent payable for any premises in terms of the Rent Acts. This is what the Supreme Court has held in the case of Corporation of Calcutta v. Smt. Padma Debi : 3SCR49 . The ratio of this judgment is, no doubt, based on the provisions of the Rent Act of West Bengal. The underlying principle also is held to be applicable even for the assessments of rateable values under the municipal enactments in Maharashtra also as held by a Division Bench of this Court in the judgment in the case of Filmistan v. Municipal Commr. (1969) 72 Bom. L.R. 461. According to the ratio of this case, the Corporation has to consider what the standard rent of the building could be, even if the building is not actually let out to any tenant or when inspite of its occupation by the tenants, there was no occasion for the competent Court to fix its standard rent. It is standard rent of the comparable buildings, and not the estimates thereof by the officer of the Corporation that can furnish basis for fixing rateable value of the building, not actually let out. In cases where no question of fixation of standard rent is raised, the assessing officer may be justified in assuming the contractual rent to be the standard rent for the purpose of such assessment in terms of the ratio of the another Division Bench judgment in Filmistan Pvt. Ltd. v. Municipal Commr. (1971) 74 Bom. L.R. 589. This law laid down by these decided cases obviously cannot permit fixation of the rateable value by reference to some estimates of rent made by the inspectors of the buildings under assessments of the comparable buildings. Mr. Walawalkar could not draw our attention to any other material which could be the basis for assessment of the rateable value by reference to the standard rent. The comparative method thus is clearly unsuitable in this case and rateable value of the building under consideration shall have to be fixed in the circumstances of this case only by reference to the contractor's method.
10. Annual letting value of any building under the contractor's method is determined by a fixed percentage of its total costs of construction. The percentage has to be fixed by reference to the reasonable return on the owner's investment in the building by way of cost of construction.
11. As indicated earlier, both the parties have led evidence about what the cost of construction of the building could be. Bodhe, the architect of the assessee has prepared statement of costs of the construction of this building. Bodhe, as indicated earlier, was the architect of the assessee and under his supervision the entire construction work was carried out. It was he, who prepared the plans and drawings required for the construction. It was he, who certified the correctness of the bills under which the payments were made to the different parties, whose representatives have been examined by the appellants to prove the said costs of construction. The statement of costs of construction prepared by Bodhe is at exh. 'B'. Exhibit 'B' consists of three parts. Statement 'A' indicates what the total cost of construction has been. It is shown to be Rs. 90,82,522. According to Mr. Bodhe, only cost to the tune of Rs. 70,94,518.37 as detailed in Statement 'B' can be treated as the cost of construction. He enclosed statement 'C' consisting of ten items. According to Mr. Bodhe, costs of these ten items to the tune of Rs. 21,53,844.98 is liable to be excluded, as the same is not the cost of building or land which alone is liable to tax under Section 140 of the Act and whose rateable value alone has to be assessed under Section 154 of the Act. It appears that the assessee has not produced their account books or the extracts thereof, nor any representative of the assessee has been examined, to vouch for the genuineness of the cost indicated in this statement. We do not, however, find any good reason to doubt the genuineness of these statements and of the relevant bills of the expenditure incurred and the amounts claimed to have been paid thereunder which have been produced and proved. We also do not see any reason to doubt the evidence of Bodhe, who has been the architect of the assessee and on whose certification the amounts had been paid to the different companies. Truth of the expenditure is further fortified by the amount of commission proved to have been paid to architect Bodhe. Bodhe was entitled in terms of his agreement with the assessee to 4 per cent. commission, as their architect, on the costs of construction. Exhibit 'W' proves the commission that was paid to him. It is also proved that part of this commission was paid directly by contractors in terms of Clause 46 of the agreement with Bodhe. Architect Namayati also has prepared his statement of costs on the basis of these figures, according to whom the costs indicated in statement 'C is not liable to be excluded. We thus have no hesitation in accepting the figures indicated in these statements to be true and genuine.
12. Controversy mainly centres around the four items, i.e. namely the cost of (1) the air-conditioning machinery of Rs. 5,91,767.50, (2) the false ceiling of Rs. 7,80,289-00, (3) the partitions of Rs. 3,45,032.10, (4) mural painting of Rs. 15,000.
13. It will be convenient to deal with mural painting costs separately. The contention of Mr. Abhyankar is that air-conditioning machinery, false ceilings and partitions are not 'land' or 'buildings' which alone are liable to tax under Section 140 and whose rateable value alone has to be worked out for assessment of the tax under Section 154 of the Act. Secondly, he contends that these are also not embeded in earth so as to form part of the building. Thirdly, he contends that their annexation to the structure is so insignificant and slight that the same can be removed without any injury or damage to the structure. Their placement on or in the structure cannot make them the part of the building any the more than placement of the chairs, tables or type-writer and other chattels therein. He, fourthly, contends that none of them are necessary or indispensable for the structure.
14. Mr. Walawalkar does not dispute that cost of land and buildings alone is relevant for fixation of the annual letting value and that the cost of chattels like chairs and tables cannot form part of the structure so as to be included in the cost of the building. He, however, contends that air-conditioning machinery, false ceiling and partitions are annexed to the structure for enhancement of the utility and the better enjoyment of the structure and they would cease to have any independent use on the structure excepting as part thereof. Their mere easy removability cannot be the determining factor in excluding them from the costs of the construction of the building.
15. The words 'land' and 'building' are defined under Clauses (r) and (s) respectively Of Section 3 of the Act. The definition of the building alone is relevant. It is inclusive and still not exhaustive. Mr. Walawalkar brought 10 our notice a Division Bench Judgment of this Court in Poona Muni. Corporation v. Shankar (1957) 60 Bom. L.R. 25. The learned Chief Justice there, was called upon to decide whether certain furniture fixed in a cinema theatre formed part of the building so as to be included in the cost thereof for rateable valuation. The learned Chief Justice referred to certain English authorities and a passage from Mulla's Transfer of Property Act, and observed (p. 27):.On the other hand, you may have furniture which, again to use an English legal expression, may become fixtures, which may be in the building not for the purpose of enjoyment of the furniture as such but which would be there in order that the use of the building should be better enjoyed. Therefore, in deciding whether furniture falls in one category or the other, we agree with Mr. Kotwal - and that is what the decisions lay down as we shall presently point out'-that the two tests that we have to apply are, one, the nature and extent or degree of annexation to the property, and the other is the object, intention or purpose of the annexation.
16. Mr. Walawalkar also drew our attention to the following passage quoted in the judgment of the trial Judge:
Now I apprehend that the premises to be rated are to be taken as they are with all their fittings and appliances by which the owner has adopted them to a particular use, and which would pass as part of the premises by a demise of them to a tenant.... Wherever the things have become so far as part of the premises that they would pass by a demise of those premises, they would form a part of the rateable subject of the inheritance for the purpose of rating.... I believe the rule really to be that things which are on the premises to be rated, and which are there for the purposes of making and which make the premises fit as premises for the particular purpose for which they are used, are to be taken into account in ascertaining the rateable value of such premises.
17. Another passage at p. 674 from the judgment of London County Council v. Wilton  2 Q.B. 653. 355, (quoted therein from Holland v. Hodgson (1872) L.R. 7 C.P. 328, at pp. 334) on which reliance was placed by the assessee's learned advocate before the Chief Judge and which also is relied by the learned Chief Justice in Poona Mun. Corpn. case (supra) also supports Mr. Walawalkar. The passage reads as follows :
There is no doubt that the general maxim of the law is, that what is annexed to the land becomes part of the land; but it is very difficult, if not impossible, to say with precision what constitutes an annexation sufficient for this purpose'.
18. The passage further reads as follows :
'It is a question which must depend on the circumstances of each case, and mainly on. two circumstances, as indicating the intention, viz., the degree of annexation and the object of the annexation. When the article in question is no further attached to the land than by its own weight it is generally to be considered a mere chattel'
But even such chattels can become part of the structure depending on intention. The passage further reads:
'But even in such a case, if the intention is apparent to make the articles part of the land, they do become part of the land : Thus blocks of stone placed one on the top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder's yard and for convenience sake stacked on the top of each other in the form of a wall, would remain Chattels'.
19. In the case of Spyer v. Phillipson (1931) 2 Ch. 183, (1931), the Court of appeal in England, in a slightly different context held that, relevant factor in such controversies is not so much the degree or extent of annexation as the purpose for which movables are attached to the building. The appeal Court quoted with approval at p. 206 the following passage from De Falbe, In re. Ward v. Taylor (1901) 1 Ch. 523, at pp. 535, 536.
'In dealing with the question of fixtures it sometimes becomes material to consider the object and purpose of the annexation, by which I do not mean that there must be an inquiry into the motive of the person who annexed them, but a consideration of the object and purpose of the annexation as it is to be inferred from the circumstances of the case'.
20. The Court of appeals than quoted the following therefrom:
That being so, it is impossible to say that the only matter to be taken into consideration is the quantum of fixture'.
At page 152 of Ryde on Rating (thirteenth edn.) the learned author has quoted the following from the judgment of Lord Denning M.R., in Field Place Caravan Park Ltd. v. Harding (1966) 2 Q.B. 484, at p. 497:.The correct proposition today is that, although a chattel is not a rateable hereditament by itself, nevertheless it may become rateable together with land, if it is placed on a piece of land and enjoyed with it in such circumstances and with such a degree of permanence that the chattel with the land can together be regarded as one unit of occupation.
21. It is true that three of the four disputed items are essentially movables and the same can be removed without much damage to the building. Indisputably, however, the same are annexed to the walls and floors or are embeded in the buiddings, however slight their annexation may turn out to be. These are so annexed for the better enjoyment of the building itself. Not so much the fact of annexation as the purpose and object thereof, is held to be relevant in terms of the above passage. On the tests laid down therein the same shall be deemed to have become the part of the building itself and their cost shall have to be included in the total cost of construction. There are, however, additional considerations in respect of each one of these items which lead to the same conclusion.
22. The Chief Judge has excluded the cost of air-conditioning from the total cost and has also excluded the rent attributable to its benefits. According to him, the machinery is not the part of the building and the cost is liable to be excluded under Section 154(2) of the Act. Its easy removability and its .being a luxury also influenced his conclusion. We are unable to agree with the learned Judge. It is not disputed that it is embedded and mounted on a concrete foundation. Secondly, and more importantly, right from the beginning, the construction and the structure was so designed as to have the entire building centrally air-conditioned, For this purpose masonry shafts were provided in both the wings of the building for the passage of hot and cool air. Provision was made for the concrete cooling towers on the terrace with wooden packing inside and steel pipes to ensure the circulation of the cooling water from tower to the ground floor and then back to the tower. The evidence of Bodhe and Mittal also shows that the false ceiling on each floor was required to be provided at the cost of Rs. 7,80,289 for the passage of the air, so essential for air-conditioning device. This cost itself is far more than the cost of the machinery. Mr. Bodhe's attempt to suggest that there was no plan to have centrally air-conditioned building from the start, is belied by his letter dated August 21, 1957 along with which the construction plan was sent to the Corporation for approval as also his admissions in cross-examination and evidence of Mittal. All this only goes to show how air-conditioning machinery is the integral part of the entire structure. Even if the removal of machinery is possible without any serious damage to the structure, it cannot but result in the frustration of the main object with which the ceiling was installed, even if it may continue serving other subservient purposes. That the false ceiling can serve other purposes also cannot make any difference to this. Removal of the air-conditioning machinery may also result in rendering other structural fittings such as the masonry shafts in the two wings and the cooling towers on the terrace, useless. Though their costs have not been assessed separately from the very nature of things the costs of these items of expenditure will bear a significant proportion to the total cost of the building. It is not disputed that the air-conditioning arrangement has enhanced the utility of the building. The entire machinery is installed therein, with prior inseparable structural arrangements for the better enjoyment of the building itself. It is difficult to conceive of any mode of enjoyment of the machinery, apart from its use for cooling the structure.
23. Mr. Abhyankar contends that the air-conditioning is a luxury and not a necessity in India and costs of such luxurious article cannot form part of the cost of the building. An admission to this effect in small measure by Namavati, the architect and the valuer examined by the Corporation, was relied on. The Chief Judge appears to have been very much impressed by this admission. We are, however, unable to see its relevance to the question under consideration. First relevant question would be : Has such machinery become the part of the building due to some degree of annexation? Second relevant question would be if it is so annexed to the building for its better enjoyment and enhancement of its utility? Third relevant question would be whether any hypothetical tenant would be ready to occupy this building with all its available facilities, amenities, structural designs, their engravings and paintings? Fourth relevant question-would be what reasonable return the tenant should be called upon to pay on the owner's total investment, required for raising such building, with all its such annexure and fixtures, so as not to exceed its standard rent. While determining the quantum of such return on the investments, the cost incurred for the building, as it is, with all the existing annexures intended for 'the better enjoyment of the premises themselves, shall have to be taken into account. It is not suggested that no tenant would ever be available for such building. The fact,, that, it is luxury cannot be relevant as long some tenant can be assumed to be available to occupy it with all such luxuries. The contention of Mr. Abhyankar thus is thoroughly untenable, the admissions of Namavati of such a machinery being a luxury notwithstanding.
24. Mr. Abhyankar then contends, that cost of the machinery shall have to be excluded because of Section 154(2) of the Act, under which any machinery 'contained' or 'situate' in or upon any building or land is liable to be excluded from the rateable value of the building or the land. Now, the tax itself being on the building and land, any machinery merely brought or kept therein obviously cannot be taxed merely because the building happens to contain it or it happens to be situated thereon. There is a distinction between the machineries installed in the building for the enjoyment of the buildings or enhancing its utility and the machineries kept in the building for purposes other than such enjoyment, or utility. The machinery referred to in Sub-section (2) of Section 154 is obviously the one which happens to be located therein otherwise than for the enjoyment of the building. Machineries kept in the building for their safe custody or protection thereof, or intended for the purposes of the production of goods and services in factories and workshops are liable to be covered by this provision of Section 154(2). Such machineries are also required to be installed or kept in the building. In fact, structures are raised for the avowed purpose of enabling installation and functioning of such machineries either for the protection or effective functioning of the factories. Machineries in these cases cannot be said to have been installed therein for the enjoyment of the structures or building itself. In such a situation the machinery can properly be said to have been 'contained' or 'situated' in the building and obviously cannot be said to have been the part of the building so as to be included in the cost of the building as such. Their value cannot be included in assessing the rateable value of the land and building, these being not liable to tax at all under Section 140 of the Act and not liable to assessment under Section 154 thereof. The machinery installed in a building for the purposes of better enjoyment of the building itself, or increasing its utility stands on different footing. It cannot be said to have been 'contained' or 'situated' in the building. As discussed earlier, the machinery becomes in such cases an integral part of the building, and the structure and machinery cannot be said to have any independent existence or utility for any purpose whatsoever. Sub-section (2) of Section 154, therefore, can have no application whatsoever to the situation like this.
25. Mr. Walawalkar drew our attention in this context to the judgment of the Division Bench of this Court in the case of Haft Dawood v. Municipal Commissioner of Bombay : (1922)24BOMLR476 . This case does take notice of the distinction discussed above. The question in that case was if electric fittings and fans installed in the buildings could be considered to be a machinery within the meaning of Section 154(2) of the Act. This Court answered the question in the negative holding that on the installation of the electric fitting, the same becomes the part of the premises, and the same being necessary for the user of the premises, their separate existence cannot be contemplated. We are unable to see any reason why this principle should not apply to the air-conditioning plaint in this case.
26. Mr. Abhyankar on the other hand relied on the Division Bench judgment of our High Court in the case of Maneklal v. Municipal Comr. (1962) 65 Bom. L.R. 480, and Bell Property Trust, Ltd. v. Hampstead Assessment Committee  2 K.B. 543. In Maneklal's case the landlord had constructed an access road and also provided electricity lights thereon by way of amenity for the benefit of his tenants, as the premises were slightly away from the main road. This was obviously taken into account while fixing the rent. This Court upheld the claim of the landlord and excluded that part of rent from the annual letting value which was attributable to this additional annexures. The ratio of this case is clearly distinguishable. The access road on which the electric installations were raised was not the part of the assessed premises and compensation for services so rendered cannot, strictly speaking, form part of the rent of the premises which were rateable under Section 154 of the Act. In Bell Property Trust, Ltd. (supra) case, the landlord had extended the benefit of constant hot water and central heating to all his tenants occupying blocks in his building. The rent paid by the tenant to the landlord also included compensation for such services and amenities. The landlord contended that the amount of rent included the compensation for heating and hot water services, and the same cannot be included while assessing rateable value. The appeal Court upheld the landlord's contention and excluded the same from the rateable value of the blocks. Ratio of this case is relied in Maneklal's case (supra) due to its apparent similarity. Irrelevance of this ratio cannot be appreciated unless the distinction between the basis of assessment in England and in India is borne in mind which is emphasised in Filmistan's case (supra). Unlike in India, it is the occupant who is liable to tax in England and it is his interest in the occupancy that is assessable. Central heating and hot water plants could not have formed the part of the blocks let out by the landlord to the tenants. Thus neither the value of premises where the plants were installed nor that of the plant itself, could be part of the value of the occupancy, the assessment of which alone was under consideration of the appeal Court. Under the municipal enactments in India including under the Act, it is the owner who is primarily liable to tax and it is his interest in the demised, property that is assessable. Ratio of this case, therefore, is inapplicable to the situation where there is a fusion of the interests of the owner and the occupant.
27. Moreover we do not know whether in the Bell Property Trust Ltd. case the apparatus for central heating or a substantial portion of the same had become an integral part of the building under assessment as in the case in respect of the building under assessement before us.
28. In our opinion, therefore, the exclusion of the cost of air-conditioning machine from the cost of buildings is not justified and the finding of the learned Chief Judge to that effect is liable to be set aside.
29. Coming now to the question of false ceilings, the case of the Corporation, appears to us to be on stronger footing. The Chief Judge was right in accepting the same, as a part of the structure. The evidence of Mittal and architect Bodhe clearly shows that right from the very beginning planners intended to have the building centrally air-conditioned and false ceilings were designed for the passage of the air as part of the air-conditioning arrangements. Mittal's suggestion of installing of ducts for the passage of air was disapproved by Bodhe on the ground of their ugly appearance. As part of the air-conditioning apparatus, false ceilings are as much inseparable part of the structure as the air-conditioning plant itself. Not much can be made out of the fact that it can be dismantled without any damage to the main building. We have already seen how the degree of annexation is not that relevant as the fact that it is installed for the better enjoyment of the building itself. It is pertinent to note that the said ceilings are partly prepared from perforated syntex boards and partly from Plaster of Paris. The costs of the latter is Rs. 1,41,169.50. It is not in dispute that in the event of dismantling process the Plaster of Paris gets destroyed completely. It means that it has no independent use or value. In fact the entire false ceiling cannot have any utility excepting as part of the structure. The learned Judge included its cost in the costs of the building inspite of having excluded the cost of air-conditioning therefrom on the ground that the ceiling enables the better enjoyment of the building in other respects also. To that extent the learned Judge is right inspite of his wrong conclusion as to the cost of air-conditioning. The conclusion of the learned Judge is right, though not the reasoning in its entirety. We are thus unable to agree with Mr. Abhyankar that false ceiling does not form the part of the structure and the cost thereof is liable to be excluded from the rateable value.
30. Question of the exclusion of the cost of partition is, no doubt, arguable. They are made from the wood and installed from the bottom to the top in sockets specially designed. Easy removability was very much relied on by Mr. Abhyankar. When one, however, turns to the tests laid down by the authorities discussed earlier, the only relevant question is if the partitions are installed in the building for the better enjoyment of the building and enhancement of its utility or not. The answer cannot but be in the affirmative. According to Bodhe. the construction of the building itself was so planned as to enable the occupants to divide the two wings of each floor by such partitions as above. Ceiling columns were designed with such partition in mind. It is not in dispute that each one of the floor is divided into parts without any walls as such. It is difficult to conceive of using such spacious halls on the floors, without their division into several blocks and cabins with the help of these partitions. Secondly, the fact that the partitions are raised from bottom to the top distinguishes them from the other partitions which can be installed on the wheels or which sometimes occupy only a portion of the hall. Partitions appear to have been designed to facilitate the better use of the air-conditioning arrangements. We were informed at the bar that the temperature of each air-conditioned cabin formed by the partition could be adjusted separately. This gives an indication of the fact that the partitions brought about separate rooms with considerable degree of permanence. It is difficult to conceive of any other use of these partitions to the occupants thereof. In fact, the partitions themselves can have no use whatsoever except when they are fitted in the sockets. There is thus no comparison between the partitions on the one hand and chattels such as chairs and tables, which could be used or engaged independently of their placement in the building on the other. This is what the learned Chief Justice was at pains to emphasise in the case of Poona Mun, Corporation (supra), while distinguishing the chairs installed in the floor of the theatre for the better enjoyment of the theatre and the chairs not so installed and yet could be enjoyed independently. Judged on this touchstone, the partitions shall have to be held as part of the structure. The trial Judge is right in including their costs in the cost of the building.
31. Coming then to the cost of mural paintings, it is obvious that the painting has enhanced the value of the premises. It has become a part and parcel of hereditament. Admittedly its removal simply cannot be conceived excepting by wiping it out and destroying it. It is not the case of a picture capable of being kept hanging which could be removed easily. The test of it being luxury or necessity appears to us to be absolutely irrelevant, as discussed earlier. The hypothetical tenant, while offering rent, is bound to take into account its value to the building. The trial Judge appears to us to be right in rejecting the contention of the assessee in this behalf.
32. Mr. Abhyankar also contends that the owner has to incur huge costs for the maintenance of the air-conditioning plant, and the assessee is entitled to deductions towards the maintenance cost of this plant if it is being treated as part of the building. The contention, no doubt, is attractive. However, Section 154(1) permits only 10 per cent. deduction 'in lieu of all allowances for repairs or on any other account whatever'. The Legislature seems to have provided for the deduction of this 10 per cent. from the annual letting value, with a view to enable the owner to meet the costs not only of repairs but also of maintenance and depreciation. The words 'on any other account whatever' are wide enough to cover costs of maintenance also. With the addition of the cost of machinery worth Rs. 5 lacs and odd, the assessee will also get the benefit of the reduction of 10 per cent. to that extent also, which will enable him to meet the cost of maintenance, repairs and the depreciation charges. The law does not admit of any additional deduction on any count. The contention thus is without any substance.
33. To the cost of construction of Rs. 70,94,518.37 shown by the architect Bodhe in his Statement 'A', the Chief Judge added (1) Rs. 3,45,032.10 being the cost of partition, (2) Rs. 7,80,289 being the cost of false ceiling, (3) Rs. 64,327 towards the salaries of the staff working during the process of construction, (4) Rs. 15,480 towards the cost of mural paintings. This raised the figure to Rs. 82,99,557.
34. The learned Judge has added three further items to this cost of construction. The two plots were obtained on lease by the assessee from the Government on July 5, 1957. The construction work commenced from February, 1958, and fresh lease was executed on November 3, 1965, after the completion of the construction. The owner was liable to pay rent during this period at the rate of Rs. 59,000 per year. In all Rs. 1,94,065.60 is paid towards ground rent during this period of construction.
35. It is then not in dispute that the assessee was required to deposit a sum of Rs. 1,61,721.28 during this period with the Government by way of security for performance of the contract. The amount obviously remained idle as far as the assessee in concerned. The amount could have been utilised by the assessee for some other purpose and turned to their benefit. The learned Judge calculated interest at 6J- per cent. on this amount for a period of eight years and four months during which period this amount remained with the Government as deposit, which comes to Rs. 1,61,721.08 and added to the cost of construction.
36. The Chief Judge has also added a sum of Rs. 14,38,589.83. This represents interest at 6 1/2 per cent. on Rs. 82,99,557.07 for two years and eight months. Now, the construction started in the month of February, 1958 and was completed on December 19, 1964. The amount of Rs. 82,99,557.07 appears to have been invested by the owner during this period from time to time as the need arose. Rather than find out the date of spending of each such amount and charge interest on it, from the date of its investment to the date of construction, the learned Judge appears to have adopted this method of treating this entire amount to have remained invested for a period of two years and eight months on an average without actual return. It was not demonstrated before us that this method of calculating two years and eight months on an average was in any manner wrong. That the amounts remained idle can hardly be disputed.
37. Mr. Abhyankar objected to addition of these hypothetical figures of interest and ground rent, In our opinion, the learned Judge was justified in treating such amounts also as costs of- construction. It is not possible to hold that he was not justified. The assessee was required to pay ground rent without any other use of the land or benefit to him. This amount turns out to have been invested in the construction itself. The same is true of the money blocked in this process and interest thereon which are part of the cost of construction. We have no doubt that any Court would be required to take these factors into account for fixing the standard rent of the building.
38. Total of all this comes to Rs. 1,00,93,935 and not Rs. 99,93,935 as wrongly shown by the trial Judge. To this shall have to be added the costs of air-conditioning of Rs. 5,91,767 excluded by the trial Judge. This addition of Rs. 5,91,767 also will necessitate addition of interest thereon at 61/2 per cent. for two years and eight months calculated by the learned Judge under item (1) at page 20 of the judgment. This amount of Rs. 5,91,767 was not included in the total of Rs. 82,99,557, because of the view taken by the learned Judge that the cost of the air-condition was liable to be excluded from the cost of construction. Mr. Abhyankar's contention with regard to the cost of maintenance has already been rejected. It is not disputed before us that in the event of inclusion of air-conditioning cost together with interest at 61/2 per cent. for two years and eight months the total of the cost of construction calculated in the manner in which it was calculated by the assessing authorities comes in all to Rs. 14,07,318. On this cost the rateable value comes to Rs. 11,81,440, after deduction of 10 per cent. in terms of Section 104(1) of the Act and the taxes liable to be paid by the assessee. This rateable value of Rs. 11,81,440 obviously is more than the rateable value of Rs, 9,97,555 assessed by the learned Chief Judge by his order under appeal. In the result, therefore, the Corporation succeeds, as in regard to the question of exclusion of air-condition cost, Corporation's contention is upheld by us.
39. We accordingly allow the appeal of the Corporation partly and dismiss that of the assessee and declare that the rateable value of the building will be Rs. 11,81,450.
40. In the circumstances of this case there will be no order as to costs in both the appeals.
41. Mr. Abhyankar applies for leave to appeal to Supreme Court under Article 133 of the Constitution and the same is rejected.