Wealth-tax charging scope requires ownership of company assets; deeming fiction cannot expand section 40 beyond its text.

Section 40 of the Finance Act, 1983 is a special charging provision for closely held companies and applies only to assets belonging to the company on the valuation date. The expression "belonging to the company" was read as requiring ownership, and Explanation 1 to section 2 of the Wealth-tax Act could not be imported to widen that scope. Section 40(5)(b) requires the Wealth-tax Act to conform to section 40, and section 40(7) does not permit broader wealth-tax provisions to override the specific charging scheme. On that basis, building and land in the assessee's possession were not chargeable under section 40.

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Issues: Whether the building and land in the assessee's possession could be brought to wealth-tax under section 40 of the Finance Act, 1983 by applying Explanation 1 to section 2 of the Wealth-tax Act.

Analysis: Section 40 is a special charging provision for closely-held companies and taxes only assets belonging to the company on the valuation date. Sub-section (5)(b) requires the remaining provisions of the Wealth-tax Act to conform to section 40, and sub-section (7) does not permit the wider provisions of the Wealth-tax Act to enlarge the scope of section 40. The expression "belonging to the company" was treated as requiring ownership, and the deeming rule in Explanation 1 to section 2 of the Wealth-tax Act could not be imported to override the unamended language of section 40. Applying that Explanation would conflict with the statutory scheme and the mandate of section 40(5)(b).

Conclusion: The building and land in the assessee's possession were not chargeable to tax under section 40 of the Finance Act, 1983, and the issue was decided in favour of the assessee.

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