1984 (9) TMI 100

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....ion or registration of a sale deed. The WTO while making assessment, included Rs. 50,686 in the net wealth of the assessee being advance against the purchases of the Bombay flat. 3. The CWT was of the opinion that the assessment so made by the WTO was erroneous and prejudicial to the interests of the Revenue inasmuch as the WTO failed to determine the value of the Bombay flat on the basis of rental income. He, therefore, initiated proceedings under s. 25(2) of the WT Act and issued show cause notice in reply to which the assessee contended that since the assessee had not become owner of the property the WTO had not done anything wrong in not including the value of this property in the net wealth of the assessee on the basis of rental inc....

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....rs. 1976 CTR (SC) 266 : (1976) 103 ITR 536 (SC) wherein it has been held that under s. 3 r/w s. 2(m) of the WT Act, 1957 liability to wealth tax arises out of the ownership of the assets, and not otherwise. Mere possession or joint possession unaccompanied by the right to, or ownership of, the property would therefore, not be property within the definition of net wealth, for it would not then be an asset "belonging" to the assessee. He also relied on the decision of the Calcutta High Court in the case of CIT vs. Ganga Properties Ltd. (1970) 77 ITR 637 (Cal) for the proposition that unless an immovable property is transferred by execution of registration of deed of sale the transferee could not claim to be owner of the said property and, acc....

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....under s. 2(m) of the WT Act liability to wealth tax arises out of the ownership of the asset, and not otherwise. Mere possession or joint possession unaccompanied by the right to, or ownership of, the property would, therefore, not be property within the definition of net wealth, for it would not then be an asset "belonging" to the assessee. It is true that the possession of the flat was delivered to the assessee along with the right to let it out, but the liability to tax does not depend on the power of the owner of let the property and it also does not depend on the capacity of the owner to receive the bona fide annual value of the property. This view has been taken by the Bombay High Court in the case of CIT vs. Zorostrian Building Socie....