1986 (7) TMI 169 - AT - Wealth-tax

Summary

Issues:
1. Whether exemption under section 5(1)(iv) of the Wealth-tax Act, 1957 should be allowed to the assessees when the flat is not registered in their names.

Analysis:
The judgment by the Appellate Tribunal ITAT Delhi-A addresses the issue of whether exemption under section 5(1)(iv) of the Wealth-tax Act, 1957 should be granted to the assessees when the flat is not registered in their names. The Tribunal noted that the provision refers to assets "belonging to the assessee" rather than "owned by the assessees." It cited precedents, including CED v. Jyotirmoy Raha and CWT v. Bishwanath Chatterjee, to explain that the term "belonging" encompasses possession and right over the asset, not just full ownership. The Tribunal emphasized that possession accompanied by a right, even without a registration deed, qualifies the asset as net wealth of the assessees. Referring to the decision in Sushil Ansal v. CIT, the Tribunal highlighted that when a builder transfers possession to buyers who have full enjoyment rights and income from the property, the builder loses ownership rights. Therefore, the income belongs to the buyers, supporting the view that income can only be assessed when it belongs to the assessee. Ultimately, the Tribunal held that the assessees are entitled to exemption under section 5(1)(iv) as the asset in question belongs to them, rejecting the revenue's contention and ruling in favor of the assessees for all three years in question.