Government-vested land cannot be treated as assessee's asset for wealth-tax when only permissive occupation exists.

Land acquired under the Land Acquisition Act, 1894 vests absolutely in the Government once the award is made and possession is taken, free from all encumbrances. Mere occupation by the assessee for use as residential quarters does not create ownership or make the land an asset "belonging to" the assessee. A later governmental consideration of sale does not alter the legal effect of vesting. Accordingly, for wealth-tax purposes, land owned by the Government but permissively occupied by the assessee cannot be included in the assessee's net wealth.

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Issues: Whether land acquired by the Government under the Land Acquisition Act, 1894 for construction of the assessee's residential colony, and in respect of which only possession was handed over to the assessee, could be treated as asset "belonging to" the assessee and included in its net wealth under the Wealth Tax Act, 1957.

Analysis: The land had been acquired through proceedings under sections 3(f), 4, 6, 11 and 16 of the Land Acquisition Act, 1894. Once the award was made and possession was taken, the land vested absolutely in the Government free from all encumbrances. The assessee had only been given possession for use as residential quarters and had not acquired ownership rights in the land. The subsequent decision of the Government to consider sale of the land did not alter the legal position of vesting. Since the Wealth Tax Act fastens charge only on assets belonging to the assessee, land owned by the Government but merely in the assessee's occupation could not be treated as part of the assessee's net wealth.

Conclusion: The land was not includible in the assessee's net wealth. The additional grounds were allowed and the additions were directed to be deleted.

Ratio Decidendi: Land acquired under the Land Acquisition Act, 1894 vests in the Government on completion of acquisition and possession, and mere permissive occupation by the assessee does not make the land an asset belonging to the assessee for wealth-tax purposes.

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