Leasehold residential property with substantial ownership rights can qualify as "belonging to" the assessee for wealth-tax deduction.

For section 5(1)(iv) of the Wealth-tax Act, 1957, the phrase "belonging to" is not confined to absolute legal ownership; it can extend to a leasehold residential house property where the assessee has substantial rights of ownership and beneficial enjoyment. A long-term lease with rights to demolish and reconstruct, raise finance on the property, and obtain renewal supported more than bare possession. On that basis, the leasehold property was treated as property belonging to the assessee, and the deduction was allowed under the exemption provision.

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Issues: Whether a leasehold residential house property in which the assessee had substantial rights could be treated as property "belonging to" the assessee so as to qualify for deduction under section 5(1)(iv) of the Wealth-tax Act, 1957.

Analysis: The expression "belonging to" was held not to be confined to absolute legal ownership. It may include a person who has a substantial slice of ownership or beneficial enjoyment, and not merely bare possession. The assessee's lease conferred extensive rights, including the right to demolish and reconstruct, to raise finance on the security of the premises, and to hold the property for a long duration with renewal rights. Those rights showed more than a mere possessory interest. The Court distinguished the authorities relied upon by the Revenue on the ground that they did not negate the broader meaning of "belonging to" in the context of wealth-tax exemption.

Conclusion: The assessee was entitled to deduction under section 5(1)(iv) of the Wealth-tax Act, 1957, in respect of the leasehold residential house property.

Ratio Decidendi: For the purposes of section 5(1)(iv) of the Wealth-tax Act, 1957, "belonging to" is not restricted to absolute ownership and may extend to a leasehold interest carrying substantial rights of ownership and beneficial enjoyment.

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