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TMI Blog1968 (9) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... to endure for twenty-five years unless otherwise determined under the covenants of the indenture. The right under the first lease was sublet by the respondent to one K. Nadar in consideration of an annual payment of Rs. 15,000 and the right under the second lease was sublet to Mettur Chemicals Ltd. in consideration of an annual payment of Rs. 18,000. The respondent made a return for the assessment year 1959-60 under the Wealth-tax Act of net wealth of Rs. 3,000 in India and Rs. 2,64,500 in foreign countries. the Wealth-tax Officer held that the value of the interest of the respondent in the salt pans for the unexpired periods of the two leases was liable to be included in the computation of her net wealth. Valuing the leasehold interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 3 provides : " Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as Wealth-tax) in respect of the not wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule. " " Net wealth " is defined in section 2(m) as meaning " the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, whether located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regoing conditions the lessee shall continue to enjoy the leased land undisturbed for a said term of twenty-five years. In case, however, there is any breach of any of the above conditions or the lessee delays payment of any sum due to the lessor for over two months from the date of its falling due or in case the licence granted under clause 9 above is cancelled or forfeited for breach of any condition of such licence the lessor may determine the lease forthwith. Each lease was liable to be determined by notice on either side at the close of any manufacturing season. The interest of the lessee under each lease was precarious ; it was liable to be determined by notice by the Government at the expiry of any manufacturing season. The leasehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horter period the interest will fall within the exception : if it is to remain available for a period exceeding six years it will fall within the definition of " assets " and its value will be liable to be included in the net wealth of the assessee. The terms of section 4 of the Wealth-tax Act also throw some light on the problem. That section prescribes certain classes of assets which are liable to be included in the net wealth of an assessee. The section, before, it was amended by the Wealth-tax (Amendment) Act, 1964, provided : " (1) In computing the net wealth of an individual, there shall be included, as belonging to him-.... (5) The value of any assets transferred under an irrevocable transfer shall be liable to be included in comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause added by the amending Act " from the date the interest vests in the assessee " after the expression " six years " in section 2(e)(v), counsel contended that this was intended to be a parliamentary exposition of the meaning of the original clause. We do not think that any such intention appears from the terms of the clause. Assuming that the exception in respect of interest in property which is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee is only to apply after the date of the amendment by the Wealth-tax (Amendment) Act, 1964, that clause has no application and the terms of the section must be interpreted as they stood at the valuation date which crystallized the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X
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