2001 (7) TMI 306 - AT - Wealth-tax

Summary

Issues:
Whether the land taken on lease by the assessee from MIDC for 95 years can be included in the net wealth of the assessee under section 40 of Finance Act, 1983.

Analysis:
The only issue contested in the appeal was whether the land leased by the assessee from MIDC for 95 years could be considered part of the assessee's net wealth under section 40 of the Finance Act, 1983. The assessee argued that they only possessed leasehold rights over the land and were not the absolute owner, thus the land should not be included in their wealth. The Assessing Officer disagreed, including the value of the land in the total wealth of the assessee.

The matter was taken to the CWT(A) who also ruled against the assessee, stating that for all practical purposes, the land belonged to the assessee-company. The assessee then appealed to the Tribunal, where the counsel vehemently contested the CWT(A) order, arguing that the land and interest in land are distinct properties. The counsel referred to various legal provisions and court decisions to support their stance. The Departmental Representative supported the CWT(A) order, contending that leasehold rights over land could be considered an asset under the Wealth-tax Act.

The Tribunal considered the arguments presented and analyzed the relevant provisions of the Wealth-tax Act. It was noted that the definition of 'asset' under the Act included not only full ownership but also interests in assets. The Tribunal emphasized that the legislative intent was clear in including interests in assets within the definition. Referring to legal definitions and precedents, the Tribunal concluded that leasehold land could be considered part of the assessee's net wealth.

The Tribunal further discussed the interpretation of the words 'belonging to' and emphasized that an asset could belong to an assessee even if not owned by them. Citing a Supreme Court case, the Tribunal highlighted that possession of an interest less than full ownership could still fall within the scope of 'belonging to'. In the current case, although legal ownership resided with MIDC, the assessee had full possession of the leasehold rights for 95 years, leading to the conclusion that the leasehold land belonged to the assessee and should be included in their net wealth.

Ultimately, the Tribunal upheld the CWT(A) order, dismissing the appeal of the assessee.