Legal ownership controls wealth-tax inclusion of immovable property; possession and contractual rights alone do not displace title.

For wealth-tax purposes, an asset is includible in net wealth only if it belongs to the assessee in law on the valuation date. Possession, contractual arrangements, or protection under section 53A of the Transfer of Property Act do not amount to ownership where no registered conveyance has been executed for immovable property of the relevant value. Applying this principle, the Crown Flour Mills continued to belong to the assessee on the valuation date, so their value was correctly included in net wealth.

---

---

Issues: Whether the assets of the Crown Flour Mills belonged to the assessee-company on the valuation date and were liable to be included in its net wealth for wealth-tax purposes.

Analysis: Under section 3 read with section 2(m) of the Wealth-tax Act, 1957, net wealth consists of assets belonging to the assessee on the valuation date. The transaction concerning the Mills showed possession, contractual arrangements, and eventual allotment of shares, but no registered sale deed was executed. For immovable property of the requisite value, transfer of title could not be completed without a registered instrument, and the protection flowing from section 53A of the Transfer of Property Act, 1882, did not amount to ownership. The authorities relied on in the context of house-property income or depreciation did not control the wealth-tax issue, because the decisive question was whether the property continued to belong to the assessee in law.

Conclusion: The Mills continued to belong to the assessee for wealth-tax purposes, and their value was correctly included in the assessee's net wealth.

Final Conclusion: The reference was answered against the assessee and in favour of the Department, with the inclusion of the Mills in the wealth-tax assessment upheld.

Ratio Decidendi: For wealth-tax, an asset belongs to the assessee only if ownership in law has passed; possession or contractual rights short of a registered conveyance do not displace legal title in respect of immovable property.

---