1993 (11) TMI 240 - AT - Wealth-tax

Tribunal upholds Stock Exchange membership card as property under Wealth-tax Act

The Tribunal dismissed both appeals by the assessee, confirming the ex parte order of the CWT (Appeals) and holding that the Stock Exchange membership ... - Issues Involved:1. Whether the Stock Exchange membership card is a property under the Wealth-tax Act.2. Whether the ex parte decision by the CWT (Appeals) was justified.Issue-wise Detailed Analysis:1. Whether the Stock Exchange membership card is a property under the Wealth-tax Act:The primary issue in this case was whether the Stock Exchange membership card held by the assessee could be considered a property under the Wealth-tax Act for the assessment years 1988-89 and 1989-90. The assessee contended that the membership of the Stock Exchange is a personal privilege and inalienable right, relying on the Bombay High Court's decision in Mrs. Sejpal R. Datal v. Stock Exchange. The CWT (Appeals) rejected this argument, stating that the membership card is a property as per section 2(e) of the Wealth-tax Act, which defines property in the broadest terms. The CWT (Appeals) further distinguished the assessee's case from the cited High Court case, noting that the membership card can be transferred through nomination or inheritance, and can be forfeited and auctioned to pay off liabilities, thus having a definite value.The Tribunal examined the relevant rules and bye-laws of the Bombay Stock Exchange, including rules on membership, inalienability, nomination, and eligibility. It noted that while Rule 5 states that membership is a personal permission, Rule 11 allows for nomination under certain conditions, indicating that the membership has transferable value. The Tribunal emphasized that the membership card's ability to be sold and the proceeds used to settle liabilities further supports its classification as a property. The Tribunal also referenced the Supreme Court's broader interpretation of property, which includes non-transferable assets, and concluded that the Stock Exchange membership card falls within the definition of property under section 2(e) of the Wealth-tax Act.2. Whether the ex parte decision by the CWT (Appeals) was justified:The second issue was whether the ex parte decision by the CWT (Appeals) was justified. The Tribunal noted that the assessee did not present any material evidence before the CWT (Appeals) to support their contention. The Tribunal reviewed the orders and decisions of the revenue authorities and found that the CWT (Appeals) had correctly applied the law and relevant rules in making the ex parte decision. The Tribunal upheld the CWT (Appeals)'s decision, confirming that the membership card is a property under the Wealth-tax Act and that the ex parte order was justified due to the lack of evidence from the assessee.Conclusion:The Tribunal dismissed both appeals by the assessee, confirming the ex parte order of the CWT (Appeals) and holding that the Stock Exchange membership card is a property under the Wealth-tax Act. The Tribunal's decision was based on a thorough examination of the relevant rules, legal definitions, and precedents, emphasizing the broad interpretation of property and the transferable value of the membership card.