Mere possession of government land is not a wealth-tax asset where no title or vested interest exists.

For wealth-tax purposes, mere occupation of government land without title or a vested interest does not make the land an asset of the assessee. Where the Government remains the owner, adverse possession for the statutory period is not established, and regularisation has been refused, the assessee's possession is only permissive or at sufferance. In that situation, the value of the encroached land is not includible in net wealth. Section 2(e)(v) of the Wealth-tax Act also supports exclusion because any interest in the land is not a vested interest of the kind contemplated by the definition of asset.

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Issues: Whether the value of government land encroached upon and occupied by the assessee could be included in the assessee's net wealth under the Wealth-tax Act, 1957.

Analysis: The assessee had no title or vested interest in the land. The Government remained the owner, and its rights were not extinguished since the assessee had not established adverse possession for the statutory period contemplated by the Limitation Act. The assessee's possession was only at the sufferance of the Government and his application for regularisation had been rejected. Mere possession, without ownership or a vested right, did not make the land an asset belonging to the assessee. The exclusion in section 2(e)(v) of the Wealth-tax Act, 1957 also applied because the interest, if any, was not vested in the assessee and was not an interest of the kind contemplated by the definition of asset.

Conclusion: The encroached land was not includible as an asset in the assessee's net wealth; the exclusion of its value was warranted.

Ratio Decidendi: For wealth-tax purposes, mere possession of land without title or a vested interest does not constitute an asset belonging to the assessee, and encroached government land under the Government's title cannot be included in net wealth.

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