1990 (12) TMI 116

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.... are not the owners of the land and that the value thereof should not be included. In this behalf, the Wealth-tax Officer rejected the contention and he valued it in the same manner as land owned by the firm. This finding was affirmed by the Appellate Asstt. Commissioner in the appeal for 1979-80 (in the case of C. Colaco). The Commissioner of Income-tax (Appeals) who heard the appeal of C.F. Colaco for assessment year 1980-81 took a slightly different view. He held that the encroached land in the occupation of the firm is an assessable asset. But he, however, held that the value cannot be the same as value of the land belonging to the firm and in his view a discount was proper on account of impending threat of eviction from the State Gover....

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....he principle is, a person in possession of land in the assumed character of owner and exercising peacefully the ordinary rights of ownership has a perfectly good tide against all the world but the rightful owner. Such possessory owner is entitled to be in possession and continue such possession unless dispossessed in due course of law by the rightful owner. It is clear that possessory right of a wrongful occupant is a substantial right capable of being transferred, inherited like the right of ownership itself. If the firm had such possessory right in 75.1 acres of trespassed land, it had an interest in that property and such interest was itself an asset. 8. Lastly, it was contended by Shri Venkatesan that this asset is, however, one fall....

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....nt of act of parties and the simplest instance is mortgage or lease. A property can be said to have vested in a receiver appointed by the Court as a consequence of an order passed. When a person dies the property may vest in the heirs. In all these cases, the vesting is on account of either operation of law or act of parties or the authority of law. 9. Where a person encroaches upon land belonging to another and continues to be in possession, the possessory interest he acquires cannot be said to be on account of interest vesting in the assessee in the sense the word "vest" found in the provision. Section 2(e)(1)(v) refers to short term assets like mortgage or lease-hold rights enuring for six years or less. It must be capable of being sa....