1988 (6) TMI 37

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..... of Rs. 55,300 which represents the life interest of the assessee in the Lai Bagh Palace by holding that personal right of residence did not constitute either an asset under section 2(e) of the Act or net wealth under section 2(m) of the Wealth-tax Act, 1957 ?" The statement of facts as received may be stated in brief as under : The assessee is the widow of late His Highness Maharaja Tukojirao Holkar. The assessee obtained a right of residence along with her husband in the Lai Bagh Palace, Indore, by letter dated January 6, 1953, issued by the Ministry of States, New Delhi. This facility was enjoyed by the assessee till the death of His Highness Maharaja Tukojirao Holkar on May 21, 1978. The value represented by this right of residence wa .....

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..... ove. Learned counsel for the Department, relying on the provisions of section 7 and rule I B framed under the said Act, submitted that the right of residence is also an asset within the meaning of section 2(e) and net wealth within the meaning of section 2(m) and that the valuation of such right can be made as per the provisions of the said Act, the right of residence being an actionable claim and that properties or things which are realisable by action in a court of law come under the term "chose-in-action". Therefore, such property, being a valuable right, is an actionable claim. Therefore, when an actionable claim is an asset, it is taxable under the Wealth-tax Act. Learned counsel further submitted that the words "if sold in the ope .....

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..... true that "property" is a term of the widest import and, subject to any limitation which the context may require, it signifies every possible interest which a person can clearly hold and enjoy. But, in the present case, it cannot be said that the right of personal residence which was given to the assessee during her lifetime is covered by the definition of "actionable claim" and consequently an asset in the hands of the assessee on the basis of which it could be said that it could fetch any price if gold in the open market as mentioned in section 7(1) of the said Act or that she could legally part with her personal right of residence for any consideration to a third person. By the Finance (No. 2) Act of 1980, which came into force on April .....

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