TaxTMI 
TaxTMI 
2000 (12) TMI 100
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....957. The question reads thus : "Whether, on the facts and in the circumstances of the case the Appellate Tribunal was right in law in upholding the Commissioner of Income-tax (Appeals) order who directed the Wealth-tax Officer to exclude the amount for the assessment year 1977-78 relating to the life interest of the assessee added by the Wealth-tax Officer in accordance with rule 1B of the Wealth-tax Rules, 1957 ?" The principal judgment of the High Court was delivered in the case of CWT v. Prince Muffakkam Jah Bahadur [1990] 186 ITR 421, which is challenged in Civil Appeals Nos. 2388 to 2394 of 1994, and it was followed in the orders which are challenged in Civil Appeal No. 3603 of 1997. The assessee is a member of the family of the l....
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....ember 5, 1971. In that matter, the Shahebzadi Anwar Begum Trust created by the late Nizam was in issue. It provided that the trustees thereof would allow the Shahebzadi to wear and use specified jewels on ceremonial or festive occasions and other specified jewels for ordinary everyday use. The trustees were empowered to convert any part of the "jewellery fund" into an income-yielding investment, the income whereof was to be paid to the Shahebzadi. In the event of the death, divorce or remarriage of the Shahebzadi, the trustees were required to sell the jewels and invest the sale proceeds and pay out the income to the children and other remote issue of the Shahabzadi and Prince Muazzam Jah. The question before the High Court was whether the ....
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....et wealth" to mean the amount by which the aggregate value, computed in accordance with the provisions of the Wealth-tax Act, of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Wealth-tax Act, is in excess of the aggregate value of all the debts owed by the assessee. Section 7 sets out how the value of assets is to be determined. So far as it is relevant here, it says : "7. Value of assets how to be determined.---(1) Subject to any rules made in this behalf, the value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Assessing Officer it would fetch....
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....the actual state of the market but only enjoined that it should be assumed that there was an open market and the property could be sold in such a market and, on that basis, its value had to be found out. It was a hypothetical case which was contemplated. The judgment of the Bombay High Court in the case of Purshottam N. Amersey [1969] 71 ITR 180 was upheld by this court in Purshottam N. Amarsay v. CWT [1973] 88 ITR 417, and observations of the kind set out above were repeated. In response to the argument on behalf of the assessee that the court had not considered the possibility of an asset not having any value whatsoever, it was said that what this court had ruled in Ahmed G. H. Ariff's case [1970] 76 ITR 471 was that even if the propert....
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....ect. Because the said life interest yielded no actual income to the assessee, the value of the said life interest so calculated was zero. Rule 1B, in so far as it is relevant, reads thus : "(1) For the purposes of sub-section (1) of section 7, the market value of the life interest of an assessee shall be arrived at by multiplying the average annual income that accrued to the assessee from the life interest by 1/p+d--1, where 'P' represents the annual premium for a wholelife insurance without profits on the life of the life tenant for unit sum assured as specified in the Appendix to these Rules, and 'd' is equal to i/1+i 'i' being the rate of interest." As has been noted, it was agreed by learned counsel appearing on behalf of both the a....