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Issues:
1. Determination of the existence of the asset, i.e., the right to receive mesne profits, before the passing of the district judge's order in 1967. Analysis: The High Court of Madhya Pradesh addressed a reference from the Wealth-tax Appellate Tribunal regarding the existence of the asset, the right to receive mesne profits, before the district judge's decree in 1967. The case involved an assessee who owned a cinema house leased to a tenant from 1950 to 1960. After legal proceedings, the district judge passed a decree in 1967 for arrears of rent and mesne profits. The Tribunal held that the right to receive mesne profits arose only in 1967, deleting the addition made by the WTO. The Court analyzed the Wealth Tax Act, emphasizing that all assets belonging to the assessee on the valuation date must be considered for wealth tax. Referring to legal precedents, the Court affirmed that the right to recover mesne profits, though a right in personam, constitutes property falling within the Act's asset definition. The Court deliberated on the nature of the right to recover mesne profits, stating that it is a chose-in-action, heritable, and not excluded from the asset definition. The Court rejected the argument that since the right cannot be sold, it is not an asset. Citing legal interpretations, the Court clarified that even if the property cannot be sold, its valuation must be estimated hypothetically. The Court emphasized that the right to recover mesne profits existed before the decree, as evidenced by its heritability and transferability. The Court highlighted that the valuation of the right may differ from the later adjudicated amount due to litigation uncertainties. In conclusion, the Court held that the right to receive mesne profits was an asset belonging to the assessee before the district judge's decree in 1967. The Court clarified that the valuation of the right should not necessarily match the later adjudicated amount. The Court made no order as to costs, concluding the judgment.
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