Income Tax Appellate Tribunal - Mumbai
Jayant Vegoils & Chemicals (P.) Ltd. vs Deputy Commissioner Of Wealth-Tax on 18 December, 1998
Equivalent citations: [2000]72ITD95(MUM)
ORDER
M.A. Bakshi, JM
1. The two appeals of the assessee, for assessment years 1984-85 and 1985-86, are directed against the consolidated order dated 16-8-1996 of Commissioner of Wealth-tax (Appeals)-XXIII, Mumbai. We are disposing of the two appeals, involving common grounds, by this consolidated order.
2. The following grounds, common to both the assessment years, have been raised.
"1.(a) The Learned Commissioner of Wealth-tax erred in confirming that the Assessing Officer was right in invoking the provisions of section 17 of the Wealth-tax Act.
(b) The Learned Commissioner of Wealth-tax could not have had any reason to believe that the appellant has escaped the assessment of chargeable wealth.
2. The Learned Commissioner of Wealth-tax erred in holding that the right to develop and sale the property is an asset covered by section 40(3)(v) of Finance Act, 1983.
3. The Learned Commissioner of Wealth-tax failed to appreciate that the appellant is not the owner, but a mere licencee to develop and sale the property allotted by CIDCO.
4. The Learned Commissioner of Wealth-tax ought to have appreciated that it was not the intention of the appellant to treat the payments made to CIDCO on account of premium as fixed asset.
5.(a) The Learned Commissioner of Wealth-tax ought to have appreciated that the appellant hid not transferred any unproductive asset to convert it into stock-in-trade being the original allottee of the land from CIDCO.
(b) The provisions could have been invoked only if the unproductive assets have been transferred to avoid the personal wealth-tax.
6. Alternatively the Learned Commissioner of Wealth-tax ought to have taken Rs. 2,142.20 per sq. mt. as the fair market value being the rate at which CIDCO has allotted land during the relevant year to other licensee."
3. The relevant facts, in this case, are that the assessee had obtained a licence of Plot No. 13, Sector 17, Vashi, New Bombay, from CIDCO for the construction of a housing complex. As per the agreement dated 22-10-1981 with CIDCO, it was agreed that the leasehold rights relating to the land would be transferred in favour of Cooperative Housing Society, constituted of the buyers of the flats in the building to be constructed by the assessee, with effect from the date of execution of the agreement, i.e., 22-10-1981. A sum of Rs. 11,10,000 had been paid by the assessee as premium to CIDCO for allotting the land. A sum of Rs. 3,84,477 and Rs. 2,750, for assessment Years 1983-84 and 1984-85 respectively had been spent by the assessee for development of the land. The assessee had agreed to complete the building within two years and in the absence of which CIDCO had the right to terminate the agreement. It has been stated before us that the assessee could not complete the construction within the period of two years. CIDCO, however, instead of terminating the agreement, collected Rs. 10.00 lakhs approximately, for the default. The assessee erected a building comprising of 63 residential flats and requested CIDCO to grant lease of the piece of land in favour of the Cooperative Societies, constituted of the buyers of the flats constructed by the assessee, on the land allotted by CIDCO. CIDCO, abiding by the agreement, executed a lease deed in favour of Navin Shree Mangal Cooperative Housing Society Limited, in March 1996. As per the lease deed, the lease is granted with effect from 22-10-1981. The assessee, in its Balance Sheet, disclosed the premium paid in its assets as leasehold rights.
4. The assessee, being a company, disclosed the value of cars and building in its assessable wealth. Neither the amount of premium paid in respect of the land nor the market value of the land was included in the wealth-tax returns. The wealth-tax assessments were completed and there was neither any query nor any discussion about the assessability of the market value of the land allotted to the assessee by CIDCO, for the construction of a housing complex. Subsequently, notice under section 17 was issued to the assessee for the respective assessment years, by virtue of which assessments were re-opened. The valuation of the land was ref erred to the Valuation Officer under section 16A, on the basis of which the Assessing Officer assessed the value of the land at Vashi at Rs. 86,95,000 for assessment Year 1984-85 and at Rs. 99,90,000 for assessment Year 1985-86. The assessee appealed to the CWT(A), but without any success.
5. Before us the assessee has challenged the validity of the proceedings initiated under section 17, on the ground that there was no non-disclosure of material facts by the assessee and accordingly the proceedings could not be reopened. On merits it has been contended that the assessee being a company, is liable to tax only in respect of the assets specified under section 40(3) of Finance Act, 1983. In the specified assets under the aforementioned provisions of the Act, the land belonging to the assessee is admittedly assessable to tax. However, it is pleaded that the land in question allotted by CIDCO did not belong to the assessee. The assessee had a mere licence to construct the housing complex and after completion of the building, a Cooperative Society had been formed and CIDCO has granted the leasehold rights of the land in favour of the said Cooperative Society. CIDCO had never transferred any rights in the land in favour of the assessee and, therefore, there was no justification for including the market value of the land as land belonging to the assessee. In this connection, reliance has been placed on the decision of the Tribunal in the case of Asstt. CWT v. Anjaria Estate (P.) Ltd. [1995] 55 ITD 53 (Ahd.). It was further contended that the report of the valuer was prepared in contravention of principle of natural justice as that no opportunity had been given to the assessee regarding comparable cases relied upon in the report. The assessee explained before the Assessing Officer that the cases referred to by the valuer were not applicable in the case of the assessee. The learned counsel for the assessee contended that in any case the asset, if any, was not an unproductive asset and, therefore, the same was not includible in the net wealth of the company. It was further contended that at best the asset could be considered to be stock-in-trade of the assessee. The interest of the assessee was to construct the flats and sell the same. It was contended that the stock-in-trade is now specifically excluded from the definition of the assets under the Wealth-tax Act and, therefore, the assessee is entitled to the benefit.
6. The learned Departmental Representatives, on the other hand, contended that the proceedings under section 17 have validly been initiated as the assessee had not disclosed the value of the land allotted to it by CIDCO. It was further contended that the assessee had sold the flats to the buyers and passed on a valid title in their favour. It was contended that no one passes a title better than the title he possesses. Unless the assessee had a title in the property, they could not have transferred the same in favour of the buyers. In this connection, reliance was placed on the decision of the Calcutta High Court in the case of CIT v. General Marketing & Mfg. Co. Ltd [1996] 222 ITR 574/86 Taxman 488. Reliance was also placed on the decision of the Supreme Court in the case of CIT v. Podar Cement (P.) Ltd. [1997] 226 ITR 625/92 Taxman 541, at Pages 638 and 640, in support of the contention that in considering the meaning of the word "owner" a realistic view has got to be taken. The assessee was holding the land in their own right and had sold the flats along with the rights in land. In such circumstances, the land belonged to the assessee, within the meaning of section 40 of the Finance Act, 1983, read with the Wealth-tax Act, 1957. It was accordingly contended that the appeals of the assessee may be dismissed.
7. In counter reply, the learned counsel for the assessee contended that in the case of Podar Cement (P) Ltd. (supra), their Lordships of the Supreme Court, at Page 646, have itself expressed a view that the position in the Income-tax Act is different that in other Acts. That decision relates to the income-tax and, therefore, is inapplicable to the wealth-tax proceedings. The learned counsel further contended that the decision of the Calcutta High Court in the case of General Marketing & Mfg. Co. Ltd. (supra) is inapplicable to the facts of this case. Reliance was also placed on the decision of the Special Bench of the Tribunal in the case of Bhilai Engg. Corpn. Ltd. v. Dy. CIT [1997] 63 ITD 223 (Nag.), where it has been held that unless the immovable property is transferred by means of a registered sale deed, the property cannot be held to belong to the assessee. The decision in the case of Podar Cement (P.) Ltd. (supra) has also been considered. It was accordingly contended that the appeals of the assessee may be allowed.
8. We have given our careful consideration to the rival contentions. The following issues emerge in these appeals :-
(1) whether the proceedings under section 17 of the Wealth-tax Act, 1957 have validly been initiated.
(2) whether the market value of the land allotted by CIDCO to the assessee for construction of a housing complex by virtue of an agreement dated 22-10-1981 falls within the ambit of net wealth under section 40(3) of the Finance Act of 1983 read with the provisions of the Wealth-tax Act, 1957.
(3) in case issue No. (2) is decided in favour of the revenue, then as to whether the land in question was stock-in-trade of the assessee and whether the same was to be excluded for purposes of assessment under the Wealth-tax Act, 1957.
9. With regard to the first issue, we are of the considered view that the proceedings have validly been initiated. A perusal of the assessment order, the statement of net wealth of the assessee and the Balance Sheet makes it abundantly clear that the assessee had not specifically disclosed the fact of allotment of the land for the construction of the housing complex by CIDCO, in their favour. The mere fact that the amount of Rs. 11,10,000 paid by the assessee as premium for the allotment of land was included in the Balance Sheet under the head "leasehold rights" in the aggregate amount of Rs. 27,60,283, does not support the claim that the assessee had disclosed all the material facts for the purposes of assessment.
We consider it relevant to refer to the Explanation to section 17 of the Wealth-tax Act, 1957, which reads as under :
"Explanation - Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso."
10. In this case, the assessee's main reliance is on the Balance Sheet filed before the Assessing Officer. The revenue does not dispute the filing of the Balance Sheet during the course of assessment proceedings. Nevertheless, a perusal of the Balance Sheet, as already pointed out, does not have the particulars, on the basis of which it could be said that the assessee had placed all material facts relating to the allotment of the land by CIDCO, before the Assessing Officer. We are therefore satisfied that the proceedings under section 17 were validly initiated.
11. We now proceed to consider the second issue, i.e., as to whether the market value of the land allotted by CIDCO falls within the ambit of the assets referred to in section 40(3) of the Finance Act, 1983. It is considered worthwhile to mention the Finance Minister's speech at the time of introduction of the Finance Bill of 1983, by virtue of which wealth-tax in the case of closely held companies was revived. This is available in 140 ITR St. 25. The then Finance Minister, with reference to section 40 of the Finance Bill, 1983, stated in the Parliament that the wealth-tax in respect of closely held companies was being revived for the purpose of assessing the unproductive assets. It is thus clear that the intention of the Parliament was to levy tax in the case of closely held companies in respect to unproductive assets. Keeping in view the intention of the Parliament, we now revert back to the main issue.
12. Section 3 of the Wealth-tax Act, 1957 is the charging section. It provides that there shall be charged for every assessment year a tax in respect of the net wealth on the corresponding valuation date of every company at the rate or rates specified in Schedule I.
13. Section 2(m) defines the term "net wealth". It reads as under :
"2(m) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date which have been 'incurred in relation to the said assets;"
14. It is evident from the aforementioned provisions of the Act that the wealth-tax is payable by taking into account all the assets, wherever located, belonging to the assessee. However, in the case of the companies, the tax is not payable in respect of all, the assets belonging to the assessee. This is evident on perusal of section 40 of the Finance Act of 1983. It is to Reproduce the relevant portion of section 40 referred to above.
"40. Revival of levy, of wealth-tax in the case of closely-held companies -
(1) Notwithstanding anything contained in section 13 of the Finance Act, 1960 (13 of 1960), relating to exemption of companies from levy of wealth-tax under the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as the Wealth-tax Act), wealth-tax shall be charged under the Wealth-tax Act for every assessment year commencing on and from the 1st day of April, 1984 in respect of the net wealth on the corresponding valuation date of every company, not being a company in which the public are substantially interested, at the rate of two per cent of such net wealth;
Provided .......
(2) For the purposes of sub-section (1), the net wealth of a company shall be the amount by which the aggregate value of all the assets referred to in sub-section (3), wherever located, belonging to the company on the valuation date is in excess of the aggregate value of all the debts owed by the company on the valuation date which are secured on, or which have been incurred in relation to, the said assets;
(3) The assets referred to in sub-section (2) shall be the following, namely :-
(i) ......
(v) land other than agricultural land;
.....
Provided that this section shall not apply to any asset referred to in clauses (i), (ii), (iii), (iv), (v) or (vi), which is held by the assessee as stock-in-trade in a business carried on by it or, in the case of motorcars referred to in clause (vii), they are held as stock-in-trade in such business or registered as taxies and used as such in a business of running motorcars on hire carried on by the assessee.
Explanation - Where any question arises as to whether all or any of the assets referred to in clauses (i), (ii), (iii) or (iv) are held by the assessee as stock-in-trade in a business carried on by it, the question shall be decided in accordance with such directions as the Board may, by general or special order, issue for the guidance of the Assessing Officer, having regard to the ratio which the yearly turnover of a business of trading in such assets bears to the average of the stocks of such assets held from time to time during the year in such business ordinarily and other relevant factors.
(4) The value of any asset specified in sub-section (3) shall be either its value as on the valuation date determined in the manner laid down in Schedule III to the Wealth-tax Act or its value, disclosed in the balance-sheet of the company, on the valuation date, whichever is higher.
Explanation - For the purposes of this sub-section, "balance-sheet", as drawn up on the valuation date, shall have the same meaning as in rule 11 of Schedule III to the wealth-tax Act."
15. It is thus seen that section 40(1) provides for the levy of wealth-tax in the case of closely held companies in respect of the net wealth. Sub-section (2) of section 40 of the Finance Act, 1983 defines the term "net wealth of the company" for the purposes of levy of Wealth-tax. It is important to notice the distinction between section 2(m) of the Wealth-tax Act, 1957 and sub-section (2) of section 40 of the Finance Act, 1983. Whereas section 2(m) of the Wealth-tax Act, 1957 defines net wealth with reference to all the assets belonging to the assessee, sub-section (2) of section 40 defines net wealth of the company with reference to the assets referred to in sub-section (3) of section 40 belonging to the company on the valuation date. The assets described in sub-section (3) of section 40 include land other than agricultural land belonging to the assessee. In this back ground, the issue before us is limited to ascertain as to whether the land in question cart be said to belong to the assessee as on the respective valuation dates. We may point out that section 4(7)(c) provides that the expression "property" includes any interest in any property, movable or immovable, the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale thereof and where the property is converted into any other property by any method, such other property. Therefore, if we were to consider as to whether the interest of the assessee in the allotted land for construction of a housing complex could be regarded as property within the meaning of Wealth-tax Act, 1957, it would perhaps not have been difficult for us to hold in favour of the revenue. However, as already clarified, every asset belonging to the assessee company is not liable to wealth-tax. Only the specified assets under sub-section (3) of section 40 are to be considered as the assets of the company for the purposes of determination of the net-wealth of the company for purposes of assessment.
16. We now proceed to consider as to whether the land allotted by CIDCO to the assessee can be said to belong to the assessee. It is not disputed that on the relevant valuation dates, i.e., 31st of March, 1984 and 31st of March, 1985, the only agreement relating to the land in question that existed with CIDCO was an agreement granting licence to the assessee company for construction of the housing complex. It would be relevant to refer to some of the clauses of the agreement, which will throw light as to the natures of rights of the assessee relating to the land. The following clauses, which are considered to be important, are reproduced hereunder :
"1. Grant of licence - During the period of two years from the date hereof, the licensee shall have licence and authority only to enter upon the said land for the purpose of erecting a building or buildings for residential purpose and for no other purpose and until the grant of lease as provided hereinafter, the licensee shall be deemed to be a mere licensee of the said land at the same rent and subject to the same terms including the liability for payment of service charges to the Corporation as if the lease has been actually executed.
2. Not a Demise - Nothing in these presents contained shall be construed as a demise in law of the said land hereby agreed to be demised or any part thereof so as to give to the licensee any legal interest therein until the lease hereby provided shall be executed and registered but the licensee shall only have a licence to enter upon the said land for the purpose of performing this Agreement. The licensee shall not be entitled to transfer or assign his rights and interests in or benefits under this agreement in favour of any person or persons provided that if he intends to have a lease in the name of a Cooperative, Housing Society or a company or an Association of Apartment Owners constituted of the buyers of Apartments in a building constructed on the said land, he will be permitted to do so if he has complied with all the terms and conditions of this Agreement and further such transfer purports to be a conveyance of his rights, title and interest in the said land and building thereon in the performance of his obligation under section 11 and other applicable provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 or any other corresponding law for the time being in force.
3. .................................................................
Time limits for commencement and completion of construction work.
(a) That he/they/it shall within a period of six months from the date hereof commence and within a period of two years from the date hereof at his/their/its own expense and in a substantial and workman like manner and with new and sound materials and in compliance with the said Development Control Regulations and any other law for the time being in force and in strict accordance with the approved plans, elevations, suctions, specifications and details to the satisfaction of the Town Planning Officer and conformably to the building lines marked on the plan and completely finish fit for occupation building to be used as residential building with all requisite drains and other proper conveniences thereto.
Restriction against appointment of Agent by a Power of Attorney or otherwise.
(o) The licensee shall not appoint any person as his/their/its agent by a Power of Attorney or otherwise, for the purposes of this Agreement except his/her spouse, father, mother or a major child and if the licensee shall be company, society or such a body corporate, its officer or servant.
4. Power to terminate Agreement - Should the Town Planning Officer not approve of the plans, elevations, sections, specifications and details whether originally submitted within the time herein before stipulated, the Managing Director may be notice in writing to the licensee, revoke the license and re-enter upon the said and thereupon the license shall come to an end.
5. Power of Corporation - Until the building and works have been completed and certified as completed in accordance with clause 7 hereof the Corporation shall have the following rights and powers :-
(a) The right of the Managing Director and Officers and servants of the Corporation acting under his directions at all reasonable times to enter upon the said land to view the state and progress, of the work and for all other reasonable purpose. To resume deed
(b) Power - (i) in case the licensee (I) shall fail to complete the said building within the time aforesaid and in accordance with the stipulations hereinbefore contained (time in this respect being of the essence of the contract) or (11) shall not proceed with the works with due diligence or shall fail to observe any of the stipulations on his part herein contained, to re-enter through the Managing Director upon and resume the said land everything thereon, and thereupon this Agreement shall cease and terminate and all erections and materials plants and things upon the said land shall not withstanding any enactment for the time being in force to the contrary belong to the Corporation without making any compensation or allowance to the licensee for and without taking any payment to the licensee for refund or repayment of any premium paid by him/them/it but without prejudice nevertheless to all other legal rights and remedies of the Corporation against the licensee.
(ii) to continue the said land in license's occupation on payment of such fine as may be decided upon by the Managing Director and
(iii) to direct removal or alteration of any building or structure erected or used contrary to the conditions of the grant within the time prescribed in that behalf and no such removal of or alteration not being carried out within the time prescribed, cause the same to be carried out and recover the cout of carrying out the same from the licensee.
(iv) All building materials and plant which shall have been brought upon the said land by or for the licensee for the purpose of erecting such building as aforesaid shall be considered immediately attached to the said land and no part thereof other than defective or improper materials (remove for the purpose of being replaced by proper materials) shall be removed from the said land without the previous consent of the Managing Director until after the grant of the completion certificate.
6. Extension of time - Notwithstanding any such default as aforesaid the Managing Director Fray in his discretion give notice to the licensee of his intention to on force the licensee's agreement herein contained or may fix any extended period for the completion of the building and the works for the said period mentioned in clause 3(d) above, if he is satisfied that the building and work could not be completed within the prescribed the for reasons beyond the reach of the licensee and of the licensor shall agree to pay additional premium at the scale provided by Regulation No. 7 of New Bombay Disposal of Lands Regulations - 1975 made by the Corporation under the provisions of the said Act and thereupon the obligations hereinunder of the licensee to complete building and to accept a lease shall be taken to refer to such extended period.
7. Graut of lease - As soon as the Town Planning Officer has certified that the building and works have been erected in accordance with the terms hereof and it' the licensee shall have observed all the stipulations Acrid conditions hereinbefore contained, the Corporation will grant Acrid the licensee will accept a lease (which shall be executed by the parties in duplicate) of the said land and the building erected thereon for the term of 60 years from the date hereof at the yearly rent of Rupees Ten.
10. Surrender - The licensee may terminate this aforementioned surrender the license and authority granted hereunder on such terms and conditions as may be determined by the Corporation from time to, time by general or special order."
17. It is seen from clause 1 of the agreement quoted above, that the assessee has been granted a mere licence to enter upon the land for the purpose of erecting a building for residential purposes and for no other purpose until the grant of lease as provided in the agreement. The agreement makes it abundantly clear that the lease was to be granted to the assessee but only after the completion of the residential building.
17.1 Clause 2 of the agreement makes it abundantly clear that the agreement shall not be construed as a demise in law of the said land so as to give any legal interest to the assessee until the lease is executed and registered.
17.2 Clause 4 of the agreement empowers the Managing Director of CIDCO to revoke the licence in certain circumstances and clause 5 of the agreement provides for the powers of the Corporation until the building and works have been completed.
17.3 Clause 6 empowers CIDCO to extend the time for completion of the building and clause 7 of the agreement specifically provides for grant of lease after the completion of construction of the building.
17.4 The above agreement, read as a whole, does not leave us in doubt that CIDCO never intended to transfer any interest in the land to the assessee until the construction of the building was completed. It is not disputed that as on the respective valuation dates relevant to assessment years 1984-85 and 1985-86, the construction of the building had not been completed and that no lease agreement had been executed by CIDCO in favour of the assessee. Undoubtedly the assessee had been given an opportunity by CIDCO to make profits by allowing to construct the building on the land belonging to CIDCO. The lease of land had also not been granted either in favour of the assessee or in favour of the Housing Cooperative Society incorporated of the buyers of flats constructed by the assessee. The subsequent execution of the agreement by CIDCO, granting leasehold rights to the Housing Cooperative Society, somewhere in 1996, also supports the view that the assessee was not having proprietary rights in regard to the land allotted to it for construction of the housing complex. The facts and circumstances of the case, as indicated above, clearly establish that the assessee was neither the de facto nor de jure owner of the land allotted by CIDCO. The land had been allotted for a specific purpose and on fulfilling the purpose the lease was granted in favour of the Housing Cooperative Society. The assessee admittedly had made profits out of this adventure. But it was never the intention of the assessee or that of CIDCO to transfer any rights in the land in favour of the assessee before the completion of the housing project. In these circumstances, it cannot be said that the land in question belonged to the assessee within the meaning of section 40 of the Finance Act, 1983 read with the provisions of Wealth-tax Act, 1957. The meaning of the words "belonging to the assessee" is well settled by the decision of the Supreme Court in the case of Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888/28 Taxman In this case, their Lordships of the Supreme Court held as under :
"The liability to wealth-tax arises because of the 'belonging of the asset and not otherwise. Mere possession, or joint possession, unaccompanied by the right to be in possession or ownership of property, would, therefore, not bring the property within the definition of "net wealth' for it would not then be an asset 'belonging to the assessee.'
18. The decision of the Supreme Court relied upon by the revenue in the case of Podar Cement (P.) Ltd. (supra) is inapplicable to the facts of this case. The said case related to the provisions of the Income-tax Act and it would be sufficient to refer to the observations of the Hon'ble Supreme Court, in this very case, at page 646, as under :-
"Though under the income-tax law, the benefit of ownership is unknown, but still if the income is assessed in the hands of the transferor who has not received the income from the property whether such a transferor can be made liable to make the payment of tax. Various decisions given by the different High Courts have taken different views. The view of the Calcutta, Bombay, Delhi and Allahabad High Courts as mentioned above is on one hand, whereas the view of the Andhra Pradesh High Court in the case of CIT v. Nawab Mir Barkat Ali Khan [1974] ILR 90 and the Karnataka High Court in the case of Ramkumar Mills (P.) Ltd. v. CIT [1989] 180 ITR 464, is different. So far as the view taken by the apex court in the case of Nawab Sir Mir Osman Ali Khan [1986] 162 ITR 888 is concerned and was in the context of the Wealth-tax Act where the language of the section was different.'
19. It is evident from the observations of the Supreme Court quoted above, that the meaning of the words "belonging to the assessee' as enunciated in the case of Nawab Sir Mir Osman Ali Khan (supra) is not diluted by the decision of the Supreme Court in the case of Podar Cement (P.) Ltd. (supra). The decision of the Supreme Court in regard to the Wealth-tax Act, 1957, in the case of Nawab Sir Mir Osman Ali Khan (supra) holds the field. Therefore, applying the tests as laid down by the Supreme Court in the case of Nawab Sir Mir Osman Ali Khan (supra), it cannot be said that the land in question belonged to the assessee as on the respective valuation dates. We accordingly hold that the land allotted to the assessee by CIDCO under the licence to construct a housing complex did not belong to the assessee as on the respective valuation dates within the meaning of section 40 of the Finance Act of 1983. The Assessing Officer was, therefore, not justified in including the market value of the land in question in wealth-tax assessments of the assessee for assessment years 1984-85 and 1985-86. The addition for the respective assessment years is accordingly deleted.
20. In the light of our above finding, it is not necessary for us to consider the third issue, as the same is rendered purely academic.
21. For statistical purposes, the appeals of the assessee are partly allowed.