Law:

Section:

Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Debt owed - Whether where there is a covenant entitling lessor to a share in leased immovable property in case of its sale, such share has to be deducted in computing net wealth of lessee even if there is no actual sale of such property in relevant accounting year - Held, yes Facts The assessee had taken on lease a plot of land from the Corporation on the condition that in case the assessee sold the plot before making any construction thereon, the Corporation would be entitled to a share of 75 per cent in the profit made in the transaction. On the relevant valuation date, the plot of land had remained without any construction by the assessee and the assessee claimed that in arriving at his net wealth, 75 per cent of the amount of increase over the cost of the plot which had been paid by him to the Corporation should be deducted from the market price of the plot. The WTO rejected the assessee's claim, and the AAC upheld the WTO's order. On second appeal, the Tribunal, however, upheld the assessee's claim: On reference: Held It was held in the case of CWT v. P.N. Sikand [1977] 107 ITR 922 (SC) that whenever there is a covenant entitling the lessor to share the profit on the sale of immovable property, the share of the lessor has to be deducted from the net wealth of the lessee in case sale of that property takes place or is assumed to have taken place. The assessee's right to claim such deduction remains unaffected even though there is no actual sale during the relevant accounting year. In the instant case, there was a covenant entitling the Corporation to a share of 75 per cent in the profit if the plot of land was sold. In view of the Supreme Court decision in Sikand's case (supra), the assessee was entitled to the deduction of share of profit payable to the Corporation. Case review CWT v. P.N. Sikand [1977] 107 ITR 922 (SC) followed. Case referred to CWT v. P.N. Sikand [1977] 107 ITR 922 (SC). WT REFERENCE NO. 468 OF 1977. M. Katiyar and A.K. Mishra for the Applicant. R.K. Gulati for the Respondent. Judgment Mehrotra, J.-At the instance of the Commissioner, the Tribunal, Allahabad Bench, has referred the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492