Law:

Section:

[Wealth Tax Act, 1963 (XIV of 1663)].........Sections 2 (e), 4, 16(3)-Assets Wealth Tax-Assessment-Assessee holding shares of Habib Bank Limited Banks nationalised under the Banks (Nationalisation) Act. 1974 and the shares vested in the Federal Government with effect from 1-1-1974-Compensarion in the form bonds payable by Government to shareholders not determined on the date of valumion, namely, 31-3-1974 -Right to compensation whether inchoate and intangible and as such not covered by Section 2 (e)-Held yes--Shares or the undetermined compensation whether asset of the assessee on the valuation date, i.e. 31-3-1974 and liable to wealth tax-Held no - [Per A.A. Dareshani, President).-The shares which the appellant possessed and owned were taken away by an Act of the Parliament. on 1-1-1974. Under this Act of the Parliament, the proprietary rights of assessee were extinguished and the shares vested in the Government from that date. Consequently, when the law provided that, the shares would in the Government of Pakistan with effect from 1-1-1974 there was no justification for saying that. the appellant still continued to be the owner of these shares. This contention is misconceived and far-fetched, as those shares, which previously constituted an asset, will never be returned to the assessee. In any case. the assessee did not have them on 31-3-1974. At the most, what the appellant had on 31-3-1974, the date of valuation, was only a promise by the Government to pay compensation. This promise to pay compensation, was something inchoate. The asset to be taxed under the Wealth Tax Act had to be from property, movable or immovable. Whatever the assessee had or expected to get, in lieu of his shares, was not an asset as contemplated by Section 2 (e) of the Wealth Tax Act. On these facts, there appears to been no doubt that on 31-3-1974. the relevant date of valuation, the appellant did not own the asset of shares, and there was no justification in law for levy of wealth tax in respect of these shares, which had before that date, vested in the Government. [Per A.A. Zuberi, Accountant Member-Contra].-In the back ground of the above authoritative pronouncements, my View is…

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