TMI Blog2000 (12) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... event, we are in agreement with the High Court, and indeed, with the Tribunal before it, that even if rule 1B did not apply, the said life interest, if an asset, had still to be valued and be included in the wealth of the assessee, which is what section 7 required. In the absence of a rule which can apply to the valuation of a particular asset, that asset must be valued in the ordinary way, by determining what it would fetch if it were sold in an assumed market ; the value being what an assumed willing purchaser would pay for it. This is how the said life interest must be assessed, upon the assumption that the assessee's personal right to reside in the property during his life time is saleable. For the reason aforestated, the judgment an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber of the family of the late Nizam of Hyderabad. One of the several trusts created by the late Nizam for the benefit of his heirs, relations and others was the Prince Mukaran Jah, Prince Muffakkam Jha and Princess Dur-Re-Shewar Trust. The trustees thereof, pursuant to the directions contained therein, constructed a house on specified land. The assessee was entitled under the terms of the trust to live in that house during his life time without being required to pay any rent. In his wealth tax return for the assessment years in question, the assessee did not include the value of the life interest so created in his favour for the reason that he had no alienable interest in the house. The Wealth-tax Officer, however, added the value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court was whether the right to wear the jewellery was an asset and whether its value could be included in the Shahebzadi's wealth for the purposes of wealth-tax. The High Court concluded that the Shahebzadi's interest was of a permissive nature and could not be called property, however widely the expression was interpreted. This was for the reason that the Shahebzadi had no proprietary interest of any sort in the jewellery and she could not lend it. Besides, the trustees were given the right to withdraw the jewellery from her and sell it without her consent. Her interest in the jewellery was limited to being allowed to wear it if the trustees did not withdraw it from her. It was common ground before the High Court that rule 1B was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer it would fetch if sold in the open market on the valuation date." Our attention was drawn by learned counsel for the Revenue to several judgments of this court and the High Court at Bombay in support of his contention that the said life interest was an asset of the assessee and it had to be taken into account in assessing his net wealth. In Ahmed G. H. Ariff v. CWT [1970] 76 ITR 471, this court was concerned with the right of a beneficiary to receive an aliquot share of the net income of properties comprised in a wakf-alal-aulad created by a Muslim governed by the Hanafi school of Mohammedan law. It was held to be property covered by the definition of assets in the Wealth-tax Act, so that the capitalised value of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 471 was that even if the property in question was incapable of being sold in the market for the reason that it was a personal asset, the interest of the assessee had to be valued by the Wealth-tax Officer. On behalf of the assessee the view taken by the High Court was commended, namely, that the said life interest was not an asset because it only conferred a personal, inalienable right to reside on the assessee. It was only a licence and, therefore, not an asset. It is difficult, having regard to what has been laid down by this court in Ahmed G. H. Ariff's case [1970] 76 ITR 471 and Purshottam N. Amarsay's case [1973] 88 ITR 417 to uphold the decision of the High Court. The assessee has, by reason of the said life interest, a right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing on behalf of both the assessee and the Revenue before the High Court that rule 1B was not workable in the circumstances of the present case, which is clearly correct for it is applicable only to an income-yielding life interest. It is, therefore, difficult to see how it can now be argued on behalf of the assessee that rule 1B was correctly applied. In any event, we are in agreement with the High Court, and indeed, with the Tribunal before it, that even if rule 1B did not apply, the said life interest, if an asset, had still to be valued and be included in the wealth of the assessee, which is what section 7 required. In the absence of a rule which can apply to the valuation of a particular asset, that asset must be valued in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
