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Issues:
1. Assessment of wealth tax on the assessee's share of rental income from a flat in Bombay. 2. Determination of the value of the flat for wealth tax purposes. 3. Applicability of Section 25(2) of the Wealth Tax Act, 1957. Analysis: The appeal was against an order by the CWT regarding the inclusion of an amount in the net wealth of the assessee for acquiring a share in a flat in Bombay. The CWT initiated proceedings under Section 25(2) of the WT Act, contending that the value of the flat should have been determined based on rental income. The assessee argued that without the transfer of ownership through a sale deed, they could not be considered the owner. The CWT, following legal precedents, determined the value of the share in the flat and included it in the net wealth. The assessee challenged this decision before the ITAT, arguing that the provisions of Section 25(2) did not apply as there was no error in the initial assessment. The Departmental representative supported the CWT's decision. The ITAT considered the facts and legal principles. It noted that ownership is crucial for wealth tax liability, as highlighted in various court judgments. Possession alone does not establish ownership for tax purposes. The Supreme Court's rulings emphasized that ownership is key for tax liability, and possession alone does not suffice. The absence of a registered sale deed means the transferee cannot be seen as the owner. The ITAT concluded that the WTO was correct in not including the value of the share in the flat in the net wealth as ownership had not transferred. Therefore, the CWT's decision under Section 25(2) was deemed incorrect and was overturned. Given the above findings, the ITAT did not delve into the valuation of the assessee's share in the flat. The appeal by the assessee was successful, and the order of the CWT was canceled. The ITAT held that the provisions of Section 25(2) were not applicable in this case, and the appeal was allowed.
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