Net wealth computation excludes fair market value of property not owned; exemption for an owned commercial flat is unavailable.

Where an assessee-HUF was not the owner of a commercial flat, its fair market value could not be included in net wealth; only the consideration actually paid towards acquisition was relevant for wealth computation. The claimed exemption under section 5(1)(iv) was also unavailable because the statutory relief applies only where the assessee owns the commercial flat. The article therefore states that wealth-tax inclusion is confined to the amount paid, and the ownership-based exemption fails on these facts.

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Issues: (i) Whether the fair market value of a commercial flat could be included in the assessee-HUF's net wealth when the property did not belong to the assessee. (ii) Whether the assessee was entitled to deduction or exemption under section 5(1)(iv) in respect of a commercial flat not owned by it.

Issue (i): Whether the fair market value of a commercial flat could be included in the assessee-HUF's net wealth when the property did not belong to the assessee.

Analysis: The governing principle applied was that where the assessee is not the owner of the property, its fair market value cannot be brought to tax as part of the assessee's net wealth. In such a situation, only the amount actually paid by the assessee towards acquisition of the property is includible in the wealth computation.

Conclusion: The fair market value was held not includible in the assessee's net wealth.

Issue (ii): Whether the assessee was entitled to deduction or exemption under section 5(1)(iv) in respect of a commercial flat not owned by it.

Analysis: The exemption under section 5(1)(iv) was found unavailable because the assessee did not own any commercial flat. The statutory benefit was therefore not attracted on the facts found.

Conclusion: The assessee was held not entitled to deduction or exemption under section 5(1)(iv).

Final Conclusion: The assessment was confined to the consideration actually paid for the flat, and the claim to exemption failed, resulting in a mixed outcome with no inclusion of the flat's fair market value in the assessee's net wealth.

Ratio Decidendi: For wealth-tax purposes, where the assessee is not the owner of the property, only the consideration actually paid can be included in net wealth and the specific exemption for an owned commercial flat is unavailable.

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