Wealth-tax valuation and exemption turn on actual rent basis and sufficient interest in property, not registered ownership alone.

For wealth-tax valuation under the yield method, actual rent was accepted as the proper basis where the assessee failed to show that the contracted rent was not the standard rent, was abnormal, or was otherwise not maintainable; the valuation based on actual rent was therefore sustained. On exemption under section 5(1)(iv) of the Wealth-tax Act, the expression "belonging to" was read as requiring only a sufficient interest, not full registered ownership, and possession protected by section 53A of the Transfer of Property Act was treated as enough for the limited exemption. The exemption claim was thus upheld.

---

---

Issues: (i) Whether the market value of the flat was to be determined on the basis of the actual rent received or by reference to standard rent under the yield method; (ii) Whether the assessee, though not the registered owner, was entitled to exemption under section 5(1)(iv) of the Wealth-tax Act, 1957.

Issue (i): Whether the market value of the flat was to be determined on the basis of the actual rent received or by reference to standard rent under the yield method.

Analysis: The assessee produced no material to show that the contracted rent was not the standard rent, that it was abnormal or fancy, or that it would not be maintainable in future. The burden lay on the assessee to establish that the actual rent could not be taken as the basis for valuation. In the absence of such proof, the actual rent realised from the property was a proper basis for computation of market value by the yield method, and the valuation made by the Wealth-tax Officer could not be faulted.

Conclusion: The valuation based on actual rent was upheld and this issue was decided against the assessee.

Issue (ii): Whether the assessee, though not the registered owner, was entitled to exemption under section 5(1)(iv) of the Wealth-tax Act, 1957.

Analysis: The exemption provision did not require full ownership. A property could be said to belong to a person if he had a sufficient interest in it. The assessee was in possession of the flat, and the builder, as legal owner, could not dislodge him because of the protection flowing from section 53A of the Transfer of Property Act, 1908. On that basis, the flat was treated as belonging to the assessee for the limited purpose of exemption.

Conclusion: The assessee was held entitled to exemption under section 5(1)(iv), and this issue was decided in favour of the assessee.

Final Conclusion: The cross-appeals were dismissed, with the valuation sustained but the exemption claim upheld.

Ratio Decidendi: For wealth-tax valuation by the yield method, actual rent may be adopted unless the assessee proves that it is not the maintainable rent; and for exemption provisions using the expression "belonging to", a person in possession with a legally protected interest may be treated as having sufficient ownership interest for the limited statutory purpose.

---