Long-term leasehold land can fall within wealth tax net where the assessee has substantial possessory rights.

Leasehold interest in unused open land taken on a long-term lease was treated as an asset under Section 40 of the Finance Act, 1983 because the provision extends beyond strict legal ownership to land "held" by the assessee for industrial purposes. The expression "belonging to" was also held broad enough to cover rights less than absolute title where the lease confers substantial, enforceable possession and enjoyment. On the terms of the ninety-five-year lease, the assessee had sufficient domain over the land, so the open land was included in net wealth for wealth tax purposes.

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Issues: (i) Whether leasehold interest in unused open land taken on a long-term lease is an asset within Section 40 of the Finance Act, 1983 for wealth tax purposes; (ii) Whether such open land can be said to "belong to" the assessee company despite legal title remaining with the lessor.

Issue (i): Whether leasehold interest in unused open land taken on a long-term lease is an asset within Section 40 of the Finance Act, 1983 for wealth tax purposes.

Analysis: Section 40(3)(v) of the Finance Act, 1983 includes land other than agricultural land, and its proviso refers to unused land "held" by the assessee for industrial purposes for more than two years. The statutory language is broader than ownership and is not confined to land legally owned by the company. The court held that the omission of wider language found in the Wealth Tax Act, 1957 does not narrow the ambit of Section 40 so as to exclude leasehold interest where the assessee has a substantial interest in the land.

Conclusion: Leasehold interest in the open land was an asset for purposes of Section 40 of the Finance Act, 1983.

Issue (ii): Whether such open land can be said to "belong to" the assessee company despite legal title remaining with the lessor.

Analysis: The expression "belonging to" in Section 40(2) was held to be capable of covering interest less than absolute ownership, depending on the nature of rights created by the document. A lease confers a legally protected right to possess and enjoy the property for the lease term, and the lease deed in question granted the assessee a long and substantive interest for ninety-five years. On the terms of the lease, the assessee had sufficient domain over the land for it to be treated as belonging to the company on the valuation date, even though ownership remained with MIDC.

Conclusion: The open land belonged to the assessee for wealth tax purposes.

Final Conclusion: The valuation of the leasehold open land was rightly included in the company's net wealth, and the appeal failed on both substantial questions of law.

Ratio Decidendi: For Section 40 of the Finance Act, 1983, "belonging to" is not confined to full legal ownership and may include a long-term leasehold interest where the assessee has a substantial and enforceable right to possess and enjoy the land.

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