TaxTMI 
TaxTMI 
1982 (7) TMI 50
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.... not earlier ? " The reference relates to the assessment years 1964-65 to 1967-68. The assessee owned a cinema house which was leased out to one Shyama Charan for a period of ten years beginning from 22nd May, 1950, and ending on 21st May, 1960, at a rent of Rs. 1,600 per month. As the lessee did not hand over possession after the expiry of the, lease, a suit was instituted by the assessee for recovery of vacant possession, arrears of rent and mesne profits. The suit was first decreed on 3rd November, 1962, regarding the claim for possession by the district judge leaving the question of arrears of rent and mesne profits to be settled thereafter. The decree for possession was affirmed by the High Court and the Supreme Court. The possessio....
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....essment year 1964-65 is 31st December, 1963, and similarly 31st December, 1964, for 1965-66, 31st December, 1965, for 1966-67 and 31st December, 1966, for 1967-68. The WTO added the amount of Rs. 1,72,000 which is the amount of mesne profits payable for the period up to 3 lst December, 1963, as an asset for the assessment year 1964-65 and for the subsequent years, the amount of Rs. 2,08,000. The AAC confirmed the order of the WTO. The Tribunal held that the right to receive the asset in the shape of mesne profits arose to the assessee only on 2nd January, 1967, when the district judge passed the decree and this did not relate back to any earlier period and, therefore, the Tribunal deleted the addition made by the WTO. On an application made....
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....he exceptions stated in s. 2(e) and other provisions of the Act. The same view was reiterated by the Supreme Court in Pandit Lakshmi Kant Jha v. CWT [1973] 90 ITR 97 at 106-107. The question then is whether the assessee's right to recover mesne profits for which he had filed a suit and which was pending on all the relevant valuation dates could be called property belonging to the assessee even before the passing of the decree relating to mesne profits. It is true that the right to recover or sue for mesne profits is a claim for unliquidated damages. It is not a debt. It is not an actionable claim as defined in s. 3 of the Transfer of Property Act, 1882. Speaking generally it is also not transferable except along with the property in resp....
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.... of any asset is estimated to be the price which in the opinion of the WTO it would fetch if sold in the open market on the valuation date and as the right to recover mesne profits cannot be sold, its valuation cannot be determined which shows that it is not property falling within the definition of assets contained in the Act. This argument cannot be accepted. It was held in Ariff's case [1970] 76 ITR 471 (SC), that the words "if sold in the open market " occurring in s. 7 do not contemplate actual sale or the actual state of the market but only enjoin that it should be, assumed that there is an open market and the property can be sold in such a market. As further pointed out in that case, these words contemplate a hypothetical case and th....