Charge on immovable property can amount to a right for wealth-tax purposes even before registration of conveyance.

An agreement for sale of immovable property, read as a whole, was treated as a conditional contract of purchase rather than a mere construction arrangement. Payments made before delivery were regarded as purchase money in anticipation of conveyance, giving the buyer a charge under section 55(6)(b) of the Transfer of Property Act to the extent of the seller's interest. Although an unregistered release deed could not itself create or extinguish rights in immovable property under sections 17 and 49 of the Registration Act, it evidenced performance of the contractual conditions. That charge was held to be more than a personal claim and sufficient to amount to a right in the property for wealth-tax purposes on the valuation date.

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Issues: Whether, on the valuation date, the assessee had acquired any right in the land or the building within the meaning of sub-paragraph (c) of Paragraph A of Part I of the Schedule to the Wealth-tax Act, 1957.

Analysis: The agreement of 14 March 1962, read as a whole, was treated as a contract for sale of property subject to conditions, not as a mere construction arrangement. The amounts paid by the assessee were held to be purchase money paid in anticipation of delivery, and therefore the assessee became entitled under section 55(6)(b) of the Transfer of Property Act to a charge on the property to the extent of the seller's interest. The unregistered release deed could not by itself create or extinguish rights in immovable property under sections 17 and 49 of the Registration Act, but it evidenced the fulfillment of the contractual conditions. A charge was held to confer more than a mere personal claim, amounting in substance to a right in the property within the wealth-tax schedule. The distinction between a charge and a simple mortgage was treated as insignificant for this purpose.

Conclusion: The assessee had acquired a right in the property on the valuation date, and the statutory provision was applicable. The answer to the referred question was therefore in the negative and against the assessee.

Ratio Decidendi: A charge arising by operation of law on immovable property, where purchase money is paid in anticipation of delivery, constitutes a right in the property for wealth-tax purposes even if the conveyance has not been registered.

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