Law:

Section:

Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Assets belonging to assessee - Assessment years 1970-71 to 1977-78 and 1983-84 to 1999-2000 - Assessee handed over gold in question in form of primary gold to District Collector on 11-12-1965 for purpose of weighing then Prime Minister for donation - However, before said transaction could take place, Prime Minister died - Meanwhile one 'G' filed a complaint claiming ownership of said gold and during pendency of adjudication of said claim, gold in question remained in custody of Government treasury - Assessee filed wealth-tax returns without disclosing value of gold and contended that since gold was not in his possession and his title to gold was in dispute, value of gold on valuation date had to be taken as nil - With effect from 1-11-1966 ownership as well as possession and control of primary gold was totally prohibited by law except to extent as provided in sub-rules (1A) and (1B) of rule 126H of Defence of India Rules, 1962 - Assessee could in terms of rule 126H(1B)(ii) exercise option either to retain gold in possession of Collector by recovering gold in question from Collector and converting primary gold into ornaments or sell same to licensed dealer or could also authorise Collector to get said primary gold converted into gold ornaments or to sell it to authorized persons and encash same before he could claim price of gold in question or converted ornaments - However, assessee failed to exercise such options - Whether since upon failure of person claiming ownership to exercise any of options open to him, ownership of primary gold would come to an end on expiry of six months from 1-11-1966, and his right would be to get price of gold at which it could be sold up to 1-5-1967, value of that right alone could be included in his net wealth - Held, yes - Whether even if assessee was not in a position to sell gold in open market whether due to disputed title or otherwise, discounting its market value for purpose of wealth-tax by Tribunal was not justified - Held, yes FACTS The assessee handed over the gold in question in the form of primary gold to the District Collector for the purpose of weighing the then…

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