2008 (1) TMI 21 - HC - Wealth-tax

Wealth tax - NOC was obtained before 1-4-1993, full payment was made before 1-4-1993 but legal ownership was transferred as on 17-3-1993. Under WT Act the assessee is firstly a member and secondly the assessee shall be allotted a building or part of the building - Asset is taxable for the AY1993-94

Summary

Issues:
Whether a flat in a tenant co-operative housing society transferred to the assessee on a specific date can be considered as "belonging" to the assessee for wealth tax liability for the assessment year 1993-94.

Analysis:
The judgment addresses the question of whether a flat in a tenant co-operative housing society, transferred to the assessee on a particular date, can be deemed as "belonging" to the assessee for wealth tax liability. The court considered the provisions of Section 4(7) of the Wealth Tax Act, 1957, which outlines the conditions for an assessee to be deemed the owner of a building or part thereof allotted or leased under a house building scheme. The section requires the assessee to be a member of the society and for the building to be allotted or leased to them. In this case, the appellant was admitted as a member before the relevant date, and the building was allotted to them by the previous member with the society's approval.

The appellant's counsel relied on the Maharashtra Co-operative Societies Rules, specifically Rule 24, regarding the procedure for the transfer of shares. However, the court emphasized that the Wealth Tax Act does not necessitate the transfer of shares for an asset to be considered as belonging to the assessee. The Act only requires membership and the allotment of a building or part thereof, both of which were fulfilled in this case. The court clarified that the State Act's provisions could not be incorporated into the Wealth Tax Act, as each state has its own laws.

Additionally, the appellant sought to rely on a Supreme Court judgment regarding the expression "belonging to" an assessee. However, the court distinguished the case cited by the appellant, as it involved different circumstances where no transfer of ownership had occurred. Ultimately, the court concluded that the question of law posed by the assessee did not apply in this appeal, leading to the dismissal of the appeal.

In conclusion, the judgment clarifies the requirements under the Wealth Tax Act for an asset to be considered as belonging to an assessee, emphasizing membership and the allotment of a building. The court's analysis highlights the specific conditions that must be met for wealth tax liability and provides a detailed interpretation of relevant legal provisions to resolve the issue at hand.