Law:

Section:

Section 7 of Wealth-tax Act, 1957 - Wealth-tax - Valuation of assets - Immovable property - Assessee, after purchasing a property from a widow, could not take possession thereof as sale of property was questioned by second wife of person to whom property belonged and suit for eviction of tenants was pending - WTO assessed said property at its market value - AAC accepted assessee's value which was lower than market value as title was in dispute and question was subjudiced - Tribunal fixed fair market value of property slightly lower than that fixed by WTO on ground that presence of 'objecting party' and difficulty to get vacant possession were relevant considerations to be taken into account for deciding price of a house property and these would have a depressing effect - Whether there was no controversy between assessee and WTO as regards ownership of house, and so long as assessee claimed that house as his, he had to pay wealth-tax in respect of same, and, therefore, inclusion of property's fair market value in assessee's net wealth was justified - Held yes FACTS The assessee purchased a house property from the widow of one 'R' for a sum of Rs. 25,000. The property was mutuated in the assessee's name in the municipal register. The assessee could not take possession of the property as the occupant, claiming herself to be the second wife of 'R', questioned the sale of the property by the first wife. The assessee could not realise any rent from the person occupying the properties. When he wanted to evict the tenants, a suit was filed in the District Court. The assessee contested it and it was decided in assessee's favour on 30-1-1962. An appeal had been filed in the High Court by the other party. In the wealth-tax return, the assessee showed the said sum as advance against the purchase of this property. The WTO, considering that the value shown in the return was below the market value, put the market value of the property at Rs. 70,000. On appeal, the AAC, considered that there were two aspects of the question, one legal and the other factual; that viewed as a question of law, it was evident that the legal title could be considered to be absolute and final only…

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