TMI Blog2012 (6) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee for the purpose of any business or profession carried on by him. Keeping in view the language of the Section it cannot be said that the assessee was in possession through the tenants. Decided in favour of the Revenue and against the Assessee. - WT APPEAL NO. 1 OF 2005 - - - Dated:- 6-1-2011 - DEEPAK GUPTA AND KULDIP SINGH, JJ. Vinay Kuthiala and Mrs. Vandana Kuthiala for the Appellant. Vishal Mohan, Pankaj Jain for the Respondent. ORDER Deepak Gupta, J. This Wealth Tax Appeal was admitted on the following questions of law: 1. Whether on the facts and in the circumstances of the case the learned ITAT was right in holding that the land was occupied by the assessee itself, particularly when it had shown substantial amounts of rental income as derived from the leasing of sheds constructed on the land in question? 2. Whether on the facts and in the circumstances of the case the ITAT was right in deleting the addition on the ground that no wealth tax was levied in the preceding and succeeding years particularly when the principle of re judicata is not applicable to income tax proceedings? 3. Whether on the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an officer or a director who is in whole-time employment, having a gross annual salary of less than five lakh rupees; (2) any house for residential or commercial purposes which forms part of stock-in-trade; (3) any house which the assessee may occupy for the purposes of any business or profession carried on by him; (4) any residential property that has been let-out for a minimum period of three hundred days in the previous year; 4. Net wealth to include certain assets. (1) In computing the net wealth ( a ) of an individual, there shall be included, as belonging to that individual, the value of assets which on the valuation date are held Explanation :- For the purposes of this section, ( a ) the expression "transfer" includes any disposition, settlement, trust, covenant, agreement or arrangement;" 3. Sh. Vinay Kuthiala, learned counsel for the Revenue submits that under Section 4 of the Act the word used is 'belonging' which has a wider connotation than ownership and it cannot by any stretch of imagination be said that the shed did not belong to the assessee. Even if title was transferred to the assessee only in the year 2003 when the property was transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee and the occupation of the property in question, and secondly that the entire consideration has been paid, and thirdly the purchasers were entitled to resist eviction from the property by the assessee in whose favour the legal title vested because conveyance has riot yet been executed by him and when the purchasers were in possession had right to call upon the assessee to execute the conveyance, it cannot be said that the property legally belonged to the assessee in terms of S. 2(m) of the Act in the facts and circumstances of the case even though the statute must be read justly and equitably and with the object of the section in view. We are conscious that if a person has the user and as in the enjoyment of the property it is he who should be made liable for the property in question under the Act; yet the legal title is important and the legislature might consider the suitability of an amendment if it is so inclined." 6. Sh. Vishal Mohan has placed strong reliance on this judgment and submits that the Apex Court in relation to the Wealth Tax Act in this judgment has clearly held that legal title is important and if legal title is not transferred then the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o do that. As Benjamin Cardozo has said, 'The judge, even when he be free, is not wholly free'. The judge cannot innovate at pleasure." Thereafter, on consideration of the various judgments of the Supreme Court the Full Bench held as follows: "A close reading of section 4, the Explanation thereto and section 2(m) of the Act makes the intention of Parliament evident as to what should be treated as belonging to the individual for the purposes of computing the net wealth. It appears to us that a property which has been transferred by the individual in favour of another under any disposition, settlement, trust, covenant, even an agreement or arrangement will cease to belong to him and cannot be brought within the fold of "belonging to" under section 2(m) of the Act and it is for that purpose that section 4 of the Act specifically provides that the properties held by persons enumerated in clause (a) of sub-section (1) under such inchoate transfer shall be included as belonging to that individual. Therefore, it follows that in the case of a transfer as defined in the Explanation to section 4 by the individual, the property cannot be said to belong to the individual unless it is withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows: "In the meantime, it would not be irrelevant to go into the concept of "ownership". What is ownership after all? Read from the Roman Law up to the English Law at the present stage, medieval stage having been interspersed with different formulae, the position that now juristically emerges is this. The full rights of an owner as now recognized are : "( a ) The power of enjoyment (e.g., the determination of the use to which the res is to be put, the power to deal with produce as he pleases, the power to destroy); ( b ) Possession which includes the right to exclude others ; ( c ) Power to alienate inter vivos, or to charge as security; ( d ) Power to leave the res by will. One of the most important of these powers is the right to exclude others. The property right is essentially a guarantee of the exclusion of other persons from the use or handling of the thing. . . . . . But every owner does not possess all the rights set out above ? - a particular owner's powers may be restricted by law or by an agreement he has made with another." (refer to G.W. Paton on Jurisprudence, 4th Edn., pp. 517-18)." Thereafter, the Apex Court further went on to hold as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds used in the Wealth Tax Act are 'belonging to' and in the Income Tax Act the words used are 'owner', there can be no dispute that 'belonging to' has to be given a much wider connotation than 'owner'. The judgment in Podar Cement (P.) Ltd.'s case ( supra ) is by a Bench of three Judges and in this case the judgment of the Apex court in Nawab Sir Mir Osman Ali Khan's case ( supra ) has been specifically noticed and distinguished. Therefore, we are bound to follow the judgment in Podar Cement (P.) Ltd.'s case ( supra ). 11. Furthermore, we are also in agreement with the Full Bench judgment of the Andhra Pradesh High court that the words 'belonging to' have to be read along with the explanation of Section 4 and under this explanation the expression of 'transfer' includes any agreement or arrangement. The assessee, in the present case, was allotted the land by the State Government. It constructed shops thereupon and rented out the same and derived income therefrom. The sheds were therefore under the domain and control of the assessee. Even if legal ownership had not passed to the assessee the property in question belonged to it. The assessee was deriving rental income and co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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