Law:

Section:

Section 2(e) of the Wealth-tax Act, 1957 - Asset - Immovable properties - Assessment year 1975-76 - Assessee entered into an agreement in writing to execute a lease deed for a period of 65 years in respect of a house property though no registered deed was executed for this purpose - Assessee was put into possession of property and it was let out to others and assessee was deriving income from it - Whether if property in question in hands of assessee could be regarded as an asset within meaning of section 53A of Transfer of Property Act, 1882, same was includible as 'asset' in hands of assessee - Held, yes FACTS The assessee had entered into an agreement in writing to execute lease deed for a period of 65 years in respect of a house property. No registered deed was, however, executed for this purpose. The assessee after taking the aforesaid property on lease, had let it out to others and was deriving income from it. For the assessment year 1975-76, the WTO held that it was a long-term lease and, therefore, its value was includible in the net wealth of the assessee. On second appeal, the Tribunal held that in the absence of any valid lease agreement the arrangement could at best be considered to be a month to month tenancy. This could be terminated at any time in accordance with law. No value would, therefore, attach to the rights of the monthly tenancy. The value of it was, therefore, excluded. On reference: HELD In the instant case, if the provisions of section 53A of the Transfer of Property Act were invoked, in that event, the transferor had no right to eject the transferee by virtue of the protection given by the aforesaid provisions. In the instant case, after taking possession, pursuant to the agreement in question, the assessee had sublet the property and was deriving income from the lease property. This aspect had not been considered by the Tribunal as to whether in the instant case the assessee had right to the property in view of section 53A and whether the property in the hands of the assessee could be regarded as an asset within meaning of section 53A or not. The matter was, thus, remanded back to the Tribunal for fresh consideration. A.C. Moitra and…

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