Law:

Section:

Section 2(e) of Wealth-tax Act, 1957 - Asset - Whether right to remuneration flowing to assessee as a mutawalli under wakf deed constitutes an asset for purposes of Act - Held, yes FACTS The assessee was daughter of one 'R'. After his death, she inherited all the properties left by him. In respect of some of the properties received by her by way of inheritance, the assessee created a wakf, which was duly registered. The wakf deed provided that the assessee was to remain the mutawalli of the wakf till her death. After her death her eldest son, was to be the mutawalli. Thereafter, the eldest son of the eldest and his heir in the male line of descent, generation after generation, were to be the mutawallis. For rendering service as provided in the wakf deed the mutawalli was to get 10 per cent of the income of the wakf as remuneration. He was also entitle to charge travelling expenses if he was required to undertake a journey in connection with the discharge of his duties. While making the assessment the WTO held that the capitalised value of the remuneration payable to the assessee was liable to be taxed under the Act. The AAC upheld the order of the WTO holding that the right of the assessee to receive 10 per cent of the income of the wakf was certainly a property in her hands and as the enjoyment of the property was not limited to years it would form part of her assets. The Tribunal, however, allowed the assessee's appeal holding that the mutawalli had no property or interest in the wakf property. On reference: HELD Per Pathak J. and Satish Chandra J. - The right to remuneration flowing to the assessee as a mutawalli under the wakf deed constitutes an asset for the purposes of the Act. Certain exceptions have been enumerated in the Act. Therefore, excluding the exceptions, all movable and immovable property, no matter of what description, is an asset for the purposes of the Act. Whether or not it is transferable does not affect the definition. Ordinarily, it may be possible to say that all property includes the right to transfer it, but because of the peculiar incidents of the property concerned or because of statutory or contractual restrictions, the potential…

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