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DATE: April 2, 2018 (Date of pronouncement)
DATE: April 16, 2018 (Date of publication)
AY: -
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CITATION:
S. 40(3) Wealth-tax: Law on whether Parliament has legislative competence to tax land and buildings which are in List-II of the 7th Schedule and whether the classification of "companies in which the public are not substantially interested" is arbitrary and violative of Article 14 of the Constitution explained (Imp constitutional law principles laid down)

Section 40(3) of the Act bringing to tax land and building which is not used for business purposes by companies in which public are not substantially interested to tax under the Wealth Tax Act and leaving out those land and buildings which are used for business purposes by companies in which public are not substantially interested from the charge of wealth tax under the Act is a reasonable classification

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DATE: October 13, 2017 (Date of pronouncement)
DATE: October 20, 2017 (Date of publication)
AY: 1970-71, 1971-72, 1972-73, 1973-74, 1974-75
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CITATION:
Entire law on the valuation of immovable properties under the 'rent capitalisation' method versus the 'land and building' method explained in the context of s. 7(2) of the Wealth-tax Act, 1957. Also, law on taking the view in favour of the assessee if two reasonable constructions of a statute are possible explained

It is true that subsection (2) of Section 7 begins with non obstante clause which enables the Wealth Tax Officer to determine the net value of the assets of the business as a whole instead of determining separately the value of each asset held by the assessee in such business. The language of subsection (2) which provides overriding power to the Wealth Tax Officer to adopt and determining the net value of the business having regard to the balance sheet of such business. The enabling power has been given to Wealth Tax Officer to override the normal rule of valuation of the properties that is the value which it may fetch in open market, Wealth Tax Officer can adopt in a case where he may think it fit to adopt such methodology. The appellants’ submission is that the provision of Section 7(2)(a) is a stand alone provision and is to be applied in all cases where assessee is carrying on a business. We do not agree with the above submission

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DATE: December 18, 2015 (Date of pronouncement)
DATE: December 21, 2015 (Date of publication)
AY: 1998-89
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CITATION:
Thought there is a difference between leasehold right and ownership right as per the Transfer of Property Act, a leasehold land in the possession of the assessee for a term of 95 years is "belonging" to the assessee and is liable for wealth-tax

We find that the word ‘belonging to the company’ has advisedly been used by the Parliament in Section 40 (2) of the Act. In case the Parliament sought to equate the word ‘belonging to’ mean ownership then in such a case, there would be no reason to use the word ‘belonging to’ and in stead use the word ‘owner of”. The intent in using the word ‘belonging to’ is to include within the provisions of the Act, assets in possession of the Company without full ownership, but sufficient domain over it, to exercise the powers which would otherwise normally vest in the owner on the valuation date. Therefore, the concept of less than full ownership is sought to be introduced by the use of the word ‘belonging to’

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DATE: September 21, 2015 (Date of pronouncement)
DATE: September 28, 2015 (Date of publication)
AY: 1977-78 to 1986-87
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CITATION:
Important principles relating to valuation of property subject to the Land Ceiling Act explained in the context of the Wealth-tax Act

One has to assume that the property in question is saleable in the open market and estimate the price which the assumed willing purchaser would pay for such a property. When the asset is under the clutches of the Ceiling Act and in respect of the said asset/vacant land, the Competent Authority under the Ceiling Act had already determined the maximum compensation of Rs.2 lakhs, how much price such a property would fetch if sold in the open market? We have to keep in mind what a reasonably assumed buyer would pay for such a property if he were to buy the same. Such a property which is going to be taken over by the Government and is awaiting notification under Section 10 of the Act for this purpose, would not fetch more than Rs.2 lakhs as the assumed buyer knows that the moment this property is taken over by the Government, he will receive the compensation of Rs.2 lakhs only. We are not oblivious of those categories of buyers who may buy “disputed properties” by taking risks with the hope that legal proceedings may ultimately be decided in favour of the assessee and in such a eventuality they are going to get much higher value. However, as stated above, hypothetical presumptions of such sales are to be discarded as we have to keep in mind the conduct of a reasonable person and “ordinary way” of the presumptuous sale. When such a presumed buyer is not going to offer more than Rs.2 lakhs, obvious answer is that the estimated price which such asset would fetch if sold in the open market on the valuation date(s) would not be more than Rs.2 lakhs

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