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TMI Blog1964 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hanafi school of the Mohammadan law, created a wakf in respect of his properties at Nos. 37 and 38, Armenian Street, Calcutta, and No. 14, Nurmal Lohia Lane, Calcutta. The settlor appointed himself the sole mutawalli for the term of his life and provided that after his death his widow, Aisha Bibi, and his sons would act as mutawallis jointly. The settlor died on 1st January, 1937, leaving behind him his widow, Aisha Bibi, and three sons, including the applicant, namely, Azam Ariff, Ahmed Ariff and Ismail Ariff. It was a wakf-alal-aulad created for the benefit of the settlor's wife, children and their descendants and the extent of the benefit conferred on them would appear from clause 5 of the deed of wakf (as rectified): "5. After payment of all necessary outgoings such as establishment charges, collections charges, revenue, taxes, costs of repairs, law charges and other expenses for the upkeep and management of the said wakf property, the mutawalli or mutawallis shall apply the net income of the said wakf property as follows, viz.: (a) In payment to me during the term of my life of one-fifth of the said net income by monthly instalments. (b) In payment to each of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its consolidated appellate order, negatived all the contentions put forward by the representative of the applicant. The Tribunal, however, held that it was not proper to estimate the value of the applicant's interest in the wakf on the basis adopted by the Wealth-tax Officer. The Tribunal found that the applicant had only a life interest in the income and the value of this interest would necessarily depend upon the expectancy of his life, rent, security and other factors. The Tribunal, therefore, directed that the value of the assessee's interest in the wakf properties should be capitalised on the basis of the standard valuation tables taking the rent and security at 6%. In the result, the Tribunal allowed the applicant's appeals protanto. 7. The consolidated order of the Tribunal together with the rectification order dated 16th March, 1962, is annexure "B" hereto forming a part of the statement. The orders of the Appellate Assistant Commissioner of Wealth-tax are marked annexures "C" and "C-1" and those of the Wealth-tax Officer as "D" and "D-1" respectively all forming a part of this statement. 8. On the above fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wakf property. Before us it was contended: (1) That such right was not property which could be described as an "asset" for the purpose of the Act. (2) If the above contention was not accepted the asset in this case was excluded from the operation of the Act by reason of section 2(e)(iv) of the Act. (3) In order to fall within the definition of "net wealth" given in section 2(m) of the Act the asset must be one which belonged to the assessee and could be dealt with or disposed of by him. (4) If the asset was such as could not be sold in the open market its capitalised value was nil for the purpose of the Act. To appreciate the argument raised it is necessary to refer to the relevant provisions of the Wealth-tax Act. Under section 2(c) "assessee" means a person by whom wealth-tax or any other sum of money is payable under the Act. Under section 2(d) "assessment year" means the year for which tax is chargeable under section 3. "Assets" have not been defined comprehensively in the Act, but under section 2(e) "asset" includes property of every description, movable or immovable, but does not include-- "(i) agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pension or other life annuity in respect of past services under an employer." Under section 7(1) the value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth-tax Officer it would fetch if sold in the open market on the valuation date. It was first argued that in order that any asset might be held to be property for the purpose of the Act the same must either be movable or immovable and an intangible right was not meant to be included within the definition of "assets". It was said that the expression "property of every description, movable or immovable" went to show that other classes of property, neither movable nor immovable, were left out of the purview of the Act. In my opinion the argument is untenable. The expression movable or immovable occurring after the words "property of every description" does not limit the ambit of property sought to be included in the computation of net wealth but is only illustrative. Section 4 of the Act read with section 2(e)(iv) shows that certain annuities not covered thereby would come within the description of "property" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, have to see whether the word "annuity" in the Act is to receive the meaning given to it by lawyers or the other which is said to be its popular sense. According to Craies on Statute Law, 5th edition, page 153, "there are two rules as to the way in which terms and expressions are to be construed when used in an Act of Parliament. The first rule is that general statutes should prima facie be presumed to use words in their popular sense." At page 155 the learned author states that "the second rule is that if the statute is one passed with reference to a particular trade, business or transaction, and words are used therein which everybody conversant with that trade, business or transaction knows and understands to have a particular meaning in it, then the words are to be construed as having that particular meaning which may differ from the ordinary or popular sense". As regards legal technology the author states at page 158, "there is a well known principle of construction, that where the legislature uses in an Act a legal term which has received judicial interpretation, it must be assumed that the term is used in the sense in which it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sset of the assessee which has got to be taken into account. If the asset disappears by reason of the non-existence of something to which it is attached or appurtenant, it may cease to belong to the assessee when the tangible property out of which it arises ceases to exist. Consequently, the fact that the ownership of the property rested or vested in God is a matter of no moment. It is not the ownership of the wakf properties which can be made taxable for the purpose of the Wealth-tax Act; it is only the right of the assessee to receive some benefit out of the income of the property which is exigible. I find myself unable to accept the contention of the assessee that because his right in this case cannot be transferred or sold for a consideration no value can be given to it under section 7(1) of the Act. No doubt section 7(1) shows how the value of an asset is to be determined but it only indicates that the value of an asset for the purpose of the Act is to be estimated as the price which it would fetch if sold in the open market on the valuation date. As the asset in this case is a non-transferable one it cannot be sold in the open market but that does not establish that it has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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