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TMI Blog1990 (12) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In this behalf, the Wealth-tax Officer rejected the contention and he valued it in the same manner as land owned by the firm. This finding was affirmed by the Appellate Asstt. Commissioner in the appeal for 1979-80 (in the case of C. Colaco). The Commissioner of Income-tax (Appeals) who heard the appeal of C.F. Colaco for assessment year 1980-81 took a slightly different view. He held that the encroached land in the occupation of the firm is an assessable asset. But he, however, held that the value cannot be the same as value of the land belonging to the firm and in his view a discount was proper on account of impending threat of eviction from the State Government. He valued the land at 50% of the rate adopted by the Wealth-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and exercising peacefully the ordinary rights of ownership has a perfectly good tide against all the world but the rightful owner. Such possessory owner is entitled to be in possession and continue such possession unless dispossessed in due course of law by the rightful owner. It is clear that possessory right of a wrongful occupant is a substantial right capable of being transferred, inherited like the right of ownership itself. If the firm had such possessory right in 75.1 acres of trespassed land, it had an interest in that property and such interest was itself an asset. 8. Lastly, it was contended by Shri Venkatesan that this asset is, however, one falling under section 2(e)(1)(v) and, as such, not includible in the net wealth being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to have vested in a receiver appointed by the Court as a consequence of an order passed. When a person dies the property may vest in the heirs. In all these cases, the vesting is on account of either operation of law or act of parties or the authority of law. 9. Where a person encroaches upon land belonging to another and continues to be in possession, the possessory interest he acquires cannot be said to be on account of interest vesting in the assessee in the sense the word "vest" found in the provision. Section 2(e)(1)(v) refers to short term assets like mortgage or lease-hold rights enuring for six years or less. It must be capable of being said that the interest in property available to the assessee is definitely not availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t always runs the risk of being dispossessed by the rightful owner so long as he has not perfected title by adverse possession. Such right should be taken at a discounted value. With regard to the extent of discount, it may vary from asset to asset and from circumstance to circumstance. In principle, we uphold the view of the Commissioner (Appeals) in giving a discount in the case of C.F. Colaco. 12. The Commissioner (Appeals), in the appeal for assessment year 1980-81, in the case of C.F. Colaco, discounted by 50% on the rate adopted in respect of the land owned by the firm. The revenue has not challenged the rate of discount. 13. In the case of C. Colaco (for assessment year 1979-80), the Appellate Asstt. Commissioner has not given an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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