9911796707
TMI Blog1985 (8) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... stated before us that the assessee carries on business as a contractor and that he constructed two bridges for the Government of Assam. The assessee filed two separate suits for recovery of compensation, being suit No. 33 of 1965 and No. 21 of 1966 in the Court of sub-Judge, Silchar. It further appears that both the suits were decreed by the sub-Judge on 15-9-1971 and the Court also awarded pendente lite interest of Rs. 49,845.98 and Rs. 57,302.24 in the two suits, respectively. It appears that the appeals were filed against the judgment of decree passed by the sub-Judge, Silchar, in the aforesaid two suits and the judgment and decree passed by the trial court in each suit were set aside by the Hon'ble Gauhati High Court. These facts were also noted by the WTO in his assessment orders for the assessment years under consideration. The entire amount of pendente lite interest awarded under the two decrees of trial court amounting to Rs. 1,07,148 was received by the assessee sometime in August 1973 and the same was spread over as follows : Assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 15,146 1970-71 15,146 1971-72 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; -------------------- 4. The WTO has further noted in the assessment orders that the assessee filed an appeal before the Hon'ble Supreme Court against the judgment and decree passed by the Hon'ble High Court. According to the WTO, right to interest is taxable. He, accordingly, added the amounts of Rs. 32,050, Rs. 47,196, Rs. 62,342, Rs. 77,488, Rs. 92,634 and Rs. 97,148 in the net wealth of the assessee for the assessment years 1968-69 to 1973-74, respectively. For the assessment year 1973-74, the WTO allowed expenses of Rs. 10,000 out of the sum of Rs. 1,07,148 and, therefore, brought to wealth-tax the balance interest amount of Rs. 97,148. 5. For the assessment year 1974-75, the WTO took the view that the interest amount was not includible in the net wealth of the assessee. 6. The ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the copies of the judgment and decree passed by the trial court in each suit have not been made available to us. On the basis of what has been submitted before us on behalf of the revenue, we can safely conclude that the assessee's right to recover compensation or damages by way of interest for breach of a contract is a mere right to sue and is not an actionable claim and is, therefore, not transferable in view of the clear provisions of section 6(e) of the Transfer of Property Act, 1882. Section 6 says that property of any kind may be transferred except as otherwise provided by this Act or any other law for the time being in force. This goes to show that a mere right to sue cannot be regarded as a property. Now, under section 3 of the Wealth-tax Act, 1957 ('the Act'), wealth-tax is chargeable in respect of net wealth of the assessee. 'Net wealth' is defined in section 2(m) of the Act and it means the amount by which the aggregate value of all the assets belonging to the assessee on the valuation date is in excess of aggregate value of all the debts owed by the assessee on the valuation date. The definition of the word 'asset' as given in section 2(e) is not exhaustive but is inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t aside by the Hon'ble High Court, the assessee's right to receive pendente lite interest under the original decrees of the trial court became extinct and no longer survived. The assessee has, no doubt, filed an appeal before the Supreme Court challenging the decision of the Hon'ble High Court, but this fact cannot have the effect of reviving the decrees of the trial court unless his claim is again decreed by the Hon'ble Supreme Court and he is again awarded pendente lite interest. The fact that he has not given up his claim is of no consequence. No, doubt, according to the material available on record, the assessee still holds the money received by him under the original decrees passed by the sub-Judge, Silchar, as pendente lite interest. But by virtue of the judgment and decree passed by the Hon'ble High Court, he lost the right to retain that amount as pendente lite interest and it is bound to be refunded to the State Government. Thus, even though the assessee is holding the money, the property in the money does not belong to him. It amounts to a debt or a liability in his hands which he owes to the State Government as under the decree of the High Court the amount received by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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