9911796707
TMI Blog1971 (7) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1957-58 ? 2. Whether, on the facts and in the circumstances of the case, the sum of Rs. 4,81,181 or any portion thereof, representing the value of debentures and shares standing in the names of the assessee and her sons were includible in the wealth of the assessee for the assessment year 1957-58 ?" Her Highness Rajkuverba Dowager Maharani Saheb of Gondal is the assessee and the assessment relates to 1957-58. The corresponding valuation date is December 31, 1956. His Highness Sri Bhojrajji Maharaja Saheb of Gondal (hereinafter called the "late Maharaja") died on July 31, 1952, leaving behind him the assessee and two sons, His Highness Vikramasinhji and Prince Shivaraja Sinhji. The late Maharaja had two personal accounts with the National Bank of India, London: one was a fixed deposit account and the other a current account. The said accounts were held in the joint names of the late Maharaja and the assessee. On the death of the late Maharaja, the bank transferred the said accounts to the sole name of the assessee. Interest arcrued was credited to the current account of the assessee. The said bank held in safe custody, on behalf of the late Maharaja and the assessee, 3 1/2% War ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the date of the said affidavit and that the applicant's costs of this application be taxed or agreed with the claimants and that the applicant be at liberty to deduct the amount thereof from the said funds and interest and that within 14 days after such taxation or agreement the said securities be transferred into court and the balance of the said funds and interest be paid into court and that the said funds and interest be invested in 3 1/2% war stock and that the said claimants do proceed to the trial of an issue in the Chancery Division of the High Court to enquire whether the said securities, funds and interest are the property of the claimants His Highness Shri Vikramsinhji Maharaja Saheb of Gondal (hereinafter called the 'present Maharaja') against Her Highness Rajkuverba Dowager Maharani Saheb of Gondal (hereinafter called 'the Dowager Maharani') or are the property of the claimant Robert Hampton Robertson Mogill as Administrator of the Estate of His Highness Shri Bhojrajji late Maharaja of Gondal--Dhoraji (hereinafter called 'the administrator') as against the Dowager Maharani in which issue the claimants the present Maharaja and the Administrator shall each be a pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present Maharaja and the assessee wrote to the Lloyds Bank Ltd., London, to the effect that instructions had been issued to their respective solicitors in London for obtaining the release of the funds and securities deposited in the High Court and for the transfer of the same to the Lloyds Bank. The letter further directed the bank to keep certain amounts for meeting the tax liability of the late Maharaja and to hold the balance of the war stock and the funds for the account of the assessee solely and absolutely. The letter further stated that the authority given therein was irrevocable. The present Maharaja and the assessee addressed joint letters to their respective solicitors in London for obtaining the release of the funds and the securities from the High Court of Justice in accordance with the terms of the settlement. On January 24, 1958, Mr. Justice Danckwerts at Chambers, on both the parties by their solicitors consenting to the order, transferred the funds and securities to the Lloyds Bank Ltd. The Wealth-tax Officer included the face value of the said securities in terms of Indian rupees at Rs. 61,39,253 and the bank balance of pound 851 which worked out to Rs. 11,346 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d included the same in the computation of her net wealth. In the appeals preferred before the Appellate Assistant Commissioner, the assessee raised a new ground on February 18, 1963. The said ground stated thus: "That through oversight certain investments like Government securities, debentures and shares standing in the joint names of the appellant and her major sons was shown as the petitioner's assets in the return of wealth submitted. The same may kindly be deleted in full as the same should be assessed separately in the status of an individual as per sections 3 and 21(4) of the Wealth-tax Act." At the stage of the arguments before the Appellate Assistant Commissioner, an alternate contention was put forward on behalf of the assessee that the Wealth-tax Officer should have assessed only 50 per cent. of the value of the joint holdings as belonging to the assessee. The Appellate Assistant Commissioner rejected the additional ground as also the alternate contention. The following facts were admitted by the assessee before the Appellate Assistant Commissioner: 1. The debentures and shares were acquired from the funds of the assessee prior to 1-4-1956; 2. They were in the possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... description, movable or immovable. The word "property" is a term of the widest import and is sufficiently comprehensive to include every species of an estate, real and personal and everything which one person can own and transfer to another. In extends to every species of right and interest capable of being enjoyed as such upon which it is practicable to place a money value. The term "property" includes not merely tangible property but also intangible rights. In English law, personal property is either, (1) a chose in possession, i.e., a thing which can be possessed and enjoyed and capable of being transferred by manual delivery known as movable property under Indian law, or (2) a chose in action, i.e., a thing that is realisable in action in a court of law known as "actionable claim" in Indian law. The right of a partnership to sue for accounts of a dissolved partnership is an instance of an "actionable claim". In the instant case, on the death of the late Maharaja when the administrator of his estate laid claim to the 3 1/2% war loan securities and bank balances with the National Bank of India, London, an interpleader action was commenced by the said bank in the High Court of Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent from the value of the tangible assets. The price, in the opinion of the Wealth-tax Officer, which the right of the assessee would fetch if sold in the open market on the valuation date would be the value of that asset. The Wealth-tax Officer has to take into consideration all the facts and circumstances of the case including the letter of agreement dated July 9, 1956. On the second question referred to, Sri, S. P. Bhat, learned counsel for the assessee, conceded that the additional ground taken on February 8, 1964, before the Appellate Assistant Commissioner is untenable and that the Tribunal was not right in deleting the entire sum of Rs. 4,81,681. He submitted that 50 per cent. of the value of the debentures and shares alone was includible in the net wealth of the assessee. Sri Rajashekara Murthy, learned counsel for the revenue, urged that on the admitted facts the assessee has to be held to be the full owner of the debentures and assets and, therefore, their entire value was includible in the net wealth. The learned counsel for the assessee urged that the facts relied on by the Appellate Assistant Commissioner, viz., that the dividends were received by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that she was the real owner of the shares and that her sons were benamidars. It is not the case of the assessee that, on the valuation date, there was any dispute between her and her sons or that her sons had laid any claim to the shares. The assessee being the real owner of the shares, the value of the said assets were includible in her net wealth for the assessment year 1957-58. The Tribunal was in error in excluding the same from the net wealth of the assessee. Our answer to the questions of law referred are: (1) that, on the facts and circumstances of the case, the sum of Rs. 58,62,248 being the value of 3 1/2 per cent. war loan securities and foreign bank balances was not includible in the net wealth of the assessee for the assessment year 1957-58, but the value of the intangible right of the assessee's claim to the said assets was includible in her net wealth. (2) On the facts and the circumstances of the case, the sum of Rs. 4,81,681 being the value of debentures and shares standing in the names of the assessee and her sons was includible in the net wealth of the assessee for the assessment year 1957-58. In the circumstances the parties are directed to bear their own ..... X X X X Extracts X X X X X X X X Extracts X X X X
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