Deemed ownership in co-operative housing society flats applies when membership and allotment exist before the valuation date.

For wealth-tax purposes, section 4(7) treats a tenant co-operative housing society flat as belonging to the assessee once membership exists and the flat has been allotted or leased under the housing scheme. Taxability is not postponed merely because transfer of shares has not yet been registered in the society's books under the Maharashtra Co-operative Societies Rules, 1961. On the stated facts, admission as a member, payment of consideration, society's no-objection and delivery of possession before the valuation date were sufficient to include the flat in net wealth for the relevant assessment year.

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Issues: Whether a flat in a tenant co-operative housing society, transferred into the assessee's name after the valuation date, could be treated as belonging to the assessee on the valuation date for wealth-tax purposes.

Analysis: Section 4(7) of the Wealth Tax Act, 1957 requires only that the assessee be a member of the co-operative society and that a building or part thereof be allotted or leased to the assessee under a house-building scheme. It does not make taxability dependent on registration of transfer of shares in the society's books under the Maharashtra Co-operative Societies Rules, 1961. The assessee had been admitted as a member before the valuation date, consideration had been paid, no-objection had been granted by the society, and possession had been given before the relevant date. The reliance on the Supreme Court decision concerning the expression "belonging to" was held to be misplaced on the facts, as that case involved absence of transfer of ownership.

Conclusion: The flat was liable to be included in the assessee's net wealth for the relevant assessment year, and the question was answered against the assessee.

Final Conclusion: The appeal failed because the statutory conditions for deemed ownership under the wealth-tax provision were satisfied before the valuation date.

Ratio Decidendi: For purposes of section 4(7) of the Wealth Tax Act, 1957, deemed ownership arises when the assessee is a member of the co-operative society and a building is allotted or leased to the assessee, and the taxability is not postponed until transfer of shares is registered in the society's books.

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