Pendente lite interest excluded from net wealth where decrees were set aside and no subsisting ownership existed.

An appeal for assessment year 1974-75 was held incompetent because no addition for interest had been made in that year and the point did not arise from the impugned order. Pendente lite interest received under trial court decrees was held not includible in net wealth after those decrees were set aside, because wealth-tax attaches only to assets legally owned by the assessee and a mere claim or possession without subsisting title is not an asset under the wealth-tax framework.

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Issues: (i) Whether the revenue's appeal for assessment year 1974-75 was competent when no addition on account of interest had been made in that year. (ii) Whether pendente lite interest received under the trial court's decrees could be included in the assessee's net wealth for the relevant assessment years.

Issue (i): Whether the revenue's appeal for assessment year 1974-75 was competent when no addition on account of interest had been made in that year.

Analysis: The appeal for that year did not arise out of the orders of the authorities below because the Wealth-tax Officer had made no addition on account of interest for assessment year 1974-75 and no appeal had been filed before the first appellate authority on that point. A ground not arising from the impugned order cannot sustain an appeal.

Conclusion: The appeal for assessment year 1974-75 was incompetent and liable to be dismissed.

Issue (ii): Whether pendente lite interest received under the trial court's decrees could be included in the assessee's net wealth for the relevant assessment years.

Analysis: Pendente lite interest arises only from a judicial award under section 34 of the Code of Civil Procedure, 1908, and before such decree there is no subsisting enforceable claim over it. The assessee's right under the trial court decrees stood extinguished when the High Court set those decrees aside, so the amount received under them could no longer be treated as property belonging to the assessee. Wealth-tax is chargeable only on assets forming part of the assessee's net wealth, and mere possession without ownership does not satisfy that test. A mere right to sue is not transferable property within section 6(e) of the Transfer of Property Act, 1882, and the amount in question therefore did not constitute an asset of the assessee under sections 2(e) and 2(m) of the Wealth-tax Act, 1957.

Conclusion: The pendente lite interest was not includible in the assessee's net wealth and the deletions made by the appellate authority were correct.

Final Conclusion: The revenue's appeals failed in full, and the additions made on account of pendente lite interest were not sustainable in wealth-tax.

Ratio Decidendi: An amount received under a decree for pendente lite interest does not form part of the assessee's net wealth where the decree is subsequently set aside, because liability to wealth-tax attaches only to assets legally owned by the assessee and not to a mere claim or possession devoid of subsisting title.

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