Law:

Section:

Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Asset belonging to assessee - Assessment years 1974-75 and 1975-76 - On 15-5-1975, a decree for declaration was passed against assessee whereby her sons were held to be owners in possession of 4/5ths share of certain properties with effect from 14-3-1952 by virtue of an oral gift made by her in their favour on that date -Whether for purposes of computation of wealth-tax assessee must be treated as having been divested of her title in aforesaid property with effect from date of oral gift, that is, 14-4-1952, and properties in question were not assessable as net wealth of assessee for assessment years 1974-75 and 1975-76 - Held, yes FACTS On 15-5-1975, a decree for declaration was passed against the assessee whereby her sons were held to be owners in possession of 4/5thS share of agricultural land and a house with effect from 14-3-1952 by virtue of an oral gift made by her in their favour. The WTO included the land and house covered by the Civil Court decree in the wealth of the assessee for the assessment years 1974-75 and 1975-76, but on account of the decree, excluded the property for the next assessment year, namely, 1976-77. On appeal, the AAC directed that only one-fifth share of the property covered by the decree be treated as the assessee's taxable wealth. This was, however, reversed on appeal by the Tribunal on the ground that immovable property could not be transferred without executing a registered document and further that the decree had been passed on the assessee consenting to the passing of it. On reference, the revenue contended that on a parity of reasoning, as until registration, title in property cannot be said to pass from the vendor to the vendee, similarly, in the case here, the assessee must be held to be the owner of the land covered by the decree until the date of the passing of the decree and, therefore, the Tribunal rightly held the assessee to be the owner of this property during the two assessment years 1974-75 and 1975-76. HELD The analogy of receipt of consideration money and possession of immovable property, agreed to be sold, before registration of the sale deed, clearly…

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