Humble Oil & Refining Co. v. Borough of Englewood Cliffs

Per Curiam.

In this matter involving the correctness of an assessment for taxes on a parcel of property leased to Humble Oil and Refining Company and used as a gasoline service station, the grant of certification was limited to the issue of the correctness of the Appellate Division determination concerning the method of capitalizing net income, particularly with reference to its conformance with this Court’s decision in New Brunswick v. State of N. J. Div. of Tax Appeals, 39 N. J. 537 (1963). The parties were also requested to brief the question of prejudiciality of the Appellate Division decision if found to be erroneous in that regard.

We find the decision of the Appellate Division to be correct and affirm its judgment substantially for the reasons set forth in its opinion reported at 135 N. J. Super. 26 (1975). Implicit in the Appellate Division’s decision is the finding that the net annual' rental was the fair rental value before taxes. Under those circumstances, capitalizing the net income before taxes is not inconsistent with New Brunswick. However, we do not subscribe to that part of the Appellate Division opinion which indicated that even if it were shown that the rent payable under the ground lease were out of line with the fair rental value during the tax years in question (the Appellate Division found otherwise), the ground lease would still be highly relevant in determining the value of the property for tax purposes.

Affirmed.