1. Though various grounds have been raised in this appeal by the assessee, the only issue which was contested by the Ld. counsel before us is whether the land taken on lease by the assessee from MIDC for a period of 95 years can be included in the net wealth of the assessee under section 40 of Finance Act, 1983.
2. The assessee-company acquired certain land known as Plot No. 18/1, Pimpri Industrial Area within the village limit of Akurdi leased for a period of 95 years from Maharashtra Industrial Development Corporation (hereinafter called MIDC) on the terms and conditions provided in the lease deed dated 29-9-1978. This deed was registered under the provisions of Bombay Stamp Act before the Sub-Registrar of Bombay. The total area of land is 9,605 sq.mt. on which assessee had constructed a factory building. The excess land admeasuring 2,175 sq.mt. is the subject matter of dispute. The Assessing Officer was of the view that value of the land is chargeable to wealth-tax under section 40 of Finance Act, 1983. The explanation of the assessee was that it possessed only the leasehold rights over the above land and was not absolute the owner of such land. Accordingly, the same could not be included in the wealth of assessee. The said contention of the assessee did not find with the Assessing Officer. Thus, the Assessing Officer included the sum of Rs. 2,17,500 in the total wealth of the assessee.
3. The matter was carried before the CWT(A) before whom the provisions of section 40 of Finance Act were brought to her notice. Then it was contended that it is the land belonging to the assessee which is taxable to wealth-tax and not the leasehold rights over the land.
According to the assessee the land belongs to the MIDC. This contention was not accepted by CWT(A) by holding that for all practicable purposes the land belongs to the assessee-company. Aggrieved by the same, the assessee is in appeal before the Tribunal.
4. The ld. counsel for the assessee, Shri Inamdar has vehemently assailed the order of the CWT(A) by reiterating the contention raised before the 1st appellate authority. In addition it was submitted by him that the land and interest in land are two different properties and whenever the legislature intended to include the interest in the property in the net wealth of the assessee, it has specifically enacted so. Our attention was invited to the provisions of section 2(e) of Wealth-tax Act, 1957. He also drew our attention to the relevant terms of the lease deed particularly, clause 1, sub-clauses (p), (r), (s) of clause 2, clause 4 and clause 5. By referring to these clauses, it was submitted by him that assessee was not the absolute owner of the land, but could enjoy the user of the land subject to the terms of lease deed. He also relied on various decisions of Supreme Court and High Courts - Late Nawab Sir Mir Osman Ali Khan v. CWT [ 1986] 162 ITR 888 (SC), CWT v. Bishwarjath Chatterjee [1976] 103 ITR 536/539 (SC), CWT v.Mohd Ismail [1979] 117 ITR 273 (Cal.). On the other hand, the ld. D.R.has strongly supported the order of CWT(A) by contending that for the purpose of Wealth-tax Act, the legislature has not used the words "owned by". The words "belong to" used by the legislature would include the interest in property and therefore, leasehold rights over land can be said to be an asset falling within the definition of the word "land".
5. Rival submissions of the parties have been considered carefully. The only issue for our consideration is whether the land taken on lease by the assessee from MIDC for a period of 95 years can be included in the net wealth of the assessee under section 40 of Finance Act, 1983.
Sub-section (1) provides that wealth-tax shall be charged in respect of net wealth of the company other than a company in which the public is substantially interested. Sub-section (2) provides that net wealth of the company shall be the aggregate value of alt the assets referred to in sub-section (3) on the valuation date which is in excess of the aggregate value of all debts owned by the company which are secured or which have been incurred in relation to such assets. Sub-section (3) refers to the list of assets which can be included in the net wealth of the assessee. Item (v) in sub-section (3) is the land other than agricultural land. The sheet anchor of the arguments of the ld. counsel for the assessee is that land does not include leasehold rights in land as such right merely creates interest in land which is distinct asset than land. According to him, whenever the legislature intended to include such right, it did provide so specifically. This contention of the ld. counsel for the assessee appears to be attractive but cannot be accepted for the reasons given hereafter.
6. Section 2(e) of Wealth-tax Act, 1957 defines "asset" in respect of which wealth-tax can be charged. Upto assessment year 1980-81 it included the property of every description but did not include the properties specified in clauses (c) to (v). Clause (v) excludes any interest in property where interest is available to the assessee for a period not exceeding six years from the date the interest vests in the assessee. This itself shows that the word "asset" included not only full ownership, but also the interest in the asset. If the words "asset" or "property" were not capable of including the "interest in asset or property" then there was no need to exclude such interest from the definition of "asset" by the legislature. Further the legislature has excluded only that interest which vests in the assessee for a period not exceeding six years. But where the interest vests in assessee for a period of exceeding six years, it was includable in the net wealth of the assessee. It is pertinent to note that section 2(e) is not an inclusive definition but is an exclusive one. Therefore, it cannot be said that land would not include the interest in land. The legislative intent is very much clear in this regard. The Black's Law Dictionary also supports the view that land includes the interest in land. The land has been defined to include any estate or interest in land either legal or equitable as well as easements and incorporable hereditaments. In view of the above discussion, the aforesaid contention of the ld. counsel for the assessee cannot be accepted.
Accordingly, it is held that land would include leasehold land.
7. The words "belonging to", in our opinion are rather wider than the words "owned by" in the sense that an asset may belong to the assessee though it may not be owned by him. The Hon'ble Supreme Court in the case of Late Nawab Sir Mir Osman Ali Khan's (supra) as held as under : "Even in some cases the phrase 'belonging to' capable of connoting interest which is less than absolute perfect legal title. See, in this connection, the observations of this court in Raja Mohammad Amir Ahmed Khan v. Municipal Board of Sitapur AIR 1965 SC 1923. This court observed in that case that though the expression "belonging to" no doubt was capable of denoting an absolute title, it was nevertheless not confined to connoting that sense. Full possession of an interest less than that of full ownership could also be signified by that expression." (P- 897) In our opinion, the above observations of their Lordships cover the issue before us as it is clear that full possession of interest less than that of full ownership falls within the ambit of the words "belonging to".
8. In the present case, no doubt the legal ownership vests in MIDC but the assessee is in full possession of leasehold rights in the land for a period of 95 years and can enjoy the same in any manner subject to the terms of lease. Accordingly, it is held that leasehold land possessed by the assessee belongs to it and therefore, is liable to be included in its net wealth. Accordingly, the order of CWT(A) is upheld.