Law: Wealth Tax Act, 1957

Section: 27(1),2(e)(iv)

Wealth Tax Act (XV of 1963)---- -- S. 2(e)-"Assets"--Definition - Exchange of principal sum due under mortgage with annuity-Preclusion from commuting annuity into a lump-sum grant found to be implied in such exchange-Held, such annuity exempted from tax. C. W. T. v. Dr. E. D. Anklesaria (1964) 53 I T R 393 (Guj.) ref. JUDGMENT TULZAPURKAR, J. -The question that has been referred to us for our determination in this reference under section 27 (1) of the Wealth Tax Act, 1957, runs as under:- "Whether, on the facts and in the circumstances of the case, the annuity of Rs. 1,000 per month arising to the assessee under Annexure `C' was exempt under section 2(e)(iv) of the Wealth Tax Act, 1957?" The question relates to wealth tax assessment for the assessment years 1962-63 and 1963-64, the relevant valuation dates being March 31, 1962, and March 31, 1963, respectively. Original assessee, Manu Subedar, since deceased (his executors have been brought on record), was a well-known economist and financial adviser. Under an agreement of lease dated November 1, 1943, made between the original assessee and the Government of India a plot of land situate in Marine Lines locality was obtained on lease by the original assessee for a period of 999 years on an annual rent of Re. 1 and for consideration of approximately Rs. 3,60,000. It appears That this plot of land was obtained by the original assessee for the purpose of constructing a cinema theatre thereon, which he could not do. On January 6, 1947, the original assessee entered into an agreement with one Habib Hussain under which Habib Hussain was granted a licence to enter upon the land and erect thereon a cinema theatre and other buildings, etc., and in consideration for the licence so granted Habib Hussain agreed today compensation to the original assessee at the rate of Rs. 4,200 per month. The original. assessee had agreed to grant a sub-lease of the plot for a term of 999 years as and when he got a regular lease from the Government of India. In October, 1949, after getting a regular lease from the Government of India the original assessee granted a sub-lease to Habib Hussain. It further appears that for the purpose of…

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