LexAHMED G. H. ARIFF & ORS. versus COMMISSIONER OF WEALTH TAX, CALCUTTA
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A B c D E F G H AHMED G. JI. ARIFF & ORS. v. COMMISSIONER OF WEALTH TAX, CALCUTTA August 20, 1969 19 (J. C. SHAH, ACTING C.J., V. RAMASWAMI AND A. N. GROVER, JJ.] Wealth Tax Act (27 of 1957), ss. 2(e), (m) and 7(1)-Right to receive share from wakf-alal-aulad-Whether asset assessable to wealth tax-"lf sold in open market" meaning of. A hanafi Muslim created a wakf-alal-aulad and appointed himself as the sole Mutwalli and provided that after his death his widow and sons would act as Mutawallis jointly. The wakf was for the benefit of the settler's wife, children and their descendants, and they were each to be paid a specified share of the net monthly income of the property. The ultimate benefit in the case of complete intestacy of the descendants of the settler was reserved for poor musalmans of sunni community deserv- ing help. On the question \vhether the right of the assessee who were the beneficiaries under the deed of wakf, to receive a specified share of the net income from the estate, was an asset assessable to weath tax, this Court, HELD : (i) The right in question was assessable to wealth tax. (i) "Property" is a term of widest import and subject to any limita- tion which the context may require, it signifies every possible interest which a person can clearly hold or enjoy. [25 C-D] The definition of "assets" in s. 2(e) and that of "net wealth" in s. 2(m) of the Wealth Act were comprehensive provisions and all assets were included in the net wealth by the very definition. Therefore, when s. 3 imposed the charge of wealth tax on the net wealth it necessarily included in it every descfiption of property of the assessee movable and immovable, barring the exceptions stated in s. 2(e) and other provisions of the Act. There is no reason or justification ~o give any restricted mean- ing to the word "assets" as defined by s. 2(e) of the Act when the langu- age employed shows that it was intended to include property Of every description. [25 H; 26 A-B] On a .propetr construction of the relevant clauses in the wakf deed, it must be held that the aliquot share of the income provided for the beneficiaries was not meant merely for their maintenance and supp0rt. But even on the assumption that it was so intended or to preserve the validity of the deeds it should be so construed the right to the share of the income would certainly be asset within the meaning of s. 2 ( e) and would be liable to be included in the net wealth of the assessee. [26 B-C] Vidya Varuthi v. Balusami Ayyar, 48 I.A. 302. 312, Abdul Karim Adenwalla v. Rahtmabai, 48 Born. L.R. 67, Commissioner, Hindu Reli- gious Endowments, Madras v. Shri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt. [1954] S.C.R. 1005, 1019 and Commissioner of Inland Revenue v. Crossman, [1937] A.C. 26, referred to. 20 SUPREME COURT· REPORTS [1970] 2 S.C.R. Conunissioner of Wealth Tax, Bombay City v. ·Purshottam N. Amersey & Anr. 71 LT.R. 180, approved. (ii) When the statute uses the words "if sold in the open market" it does not contemplate actual sale or the actual state of the market, but only enjoins that- it should be assumed that there is· an open market and the property can be sold in such a market and on that basis the value has to be found out. It is a hypothetical case which is contemplated and the Tax Officer must assume that there is an open market in which the asset can be sold. [26 E-F] (iii) The contention, that the tight to receive a share of the income was a mere right to an annuity where the terms and conditions relating thereto precluded the commutation of any portion into a lump sum grant must be rejected. The \\'Ord "annuity" could not be given its popular and dictionary meaning, but should be given the signification which it has assumed as a legal term owing to judicial interpretation. Where the legislature uses a legal term which has received judicial interpretation courts must assume that the terms has been used in the sense in which it has been judicially interpreted. [26 G-H; 27 A-Bl CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2129 to 2132 oi 1968. Appeals from the judgment and order dated December 4, 1964 of the Calcutta High Court in Tax Matters Nos. 69, 62 and 64 of 1963. A. K. Sen, S. K. Hazare and P. K. Mukherjee, for the appel- lants (in all the appeals). B. Sen, S. A. L. Narayarta Rao and R. N. Sachthey, for the respondent (in all the appeals). The Judgment o
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