ORDER
Shri S.R. Chauhan, J. M.
1. As all the five appeals involve common issues so far the sake of convenience we are taking them up altogether to be disposed of by this consolidated order it may also be noted that W. T. A. No. 51 (Cal.) of 1993 is an appeal by the assessee and pertains to the assessment year 1988-89, whereas the rest of the four appeals [being Nos. 62 to 65 (Cal.) of 1993] are preferred by the department and they pertain to the assessment years 1984-85 to 1987-88. All the above five appeals have been preferred against the common order of the CWT (A) dated 12-8-1992.
2. The above four departmental appeals have been field by delay of one day. Application for the condonation of the said delay has been field by he department. After hearing both the parties and considering the facts and circumstances of the case, the said delay is hereby condoned and the appeals are admitted.
3. Shortly stated relevant facts leading to these appeals are that the assessee-company is in occupation of an immovable property situated at 6/1/2, Queen’s Park, Calcutta. The said property belongs to one Smt. Swati Choudhury who let it out to Dhruba Kumar Sen as tenant in June 1971. There having been a dispute between Smt. Swati Choudhury, lessor and Dhruba Kumar Sen, the then tenant. The said dispute was resolved by an arbitration award dated 18-12-1982 wherein among other things it was provided that the lessor/land-lady will execute the lease deed for 99 years in favour of Dhruba Kumar Sen or his nominee. Subsequently on 20-7-1983, a tripartite agreement was entered into amongst Smt. Swasti Choudhury, Dhruba Kumar Sen and the assessee whereby among other things it was provided that Dhruba Kumar sen has sublet the property to the assessee, the lessor to execute the lease deed for 99 years in favour of the assessee and till the execution and registration of the lease deed Smt. Swati Choudhury, the lessor, to execute an irrevocable Power of Attorney in favour of the lessee authorising the lessee to do all the acts of the owner. Thereafter another agreement dated 30-9-1986 was entered into between Smt. Swati Choudhury and the assessee which, among other things, also provided that the lessee Smt. Swati Choudhury agreed to sell the said property to the lessee and to execute sale deed of the said property in favour of the lessee, the assessee, and that till the execution and registration of the said conveyance deed the lessee to continue to hold the property subject to the payment of lease rent. This is laos undisputed that the said sale deed has not yet been executed and registered. However, the WTO brought the assessee under assessment regarding the said property for all the five years 1984-85 to 1988-89 treating the assessee as owner of the said property considering various facts and circumstances enumerated by him in para 4.10 of his assessment order each dated 20-3-1992. Aggrieved against this the assessee went in appeal before the CWT (A), who decided all the five appeals of the assessee by his impugned consolidated common order dated 12-8-1992, whereby the ld. CWT (A) allowed the assessee’s appeal for the assessment years 1984-85 to 1987-88 holding the assessee-company as not assessable to wealth-tax in respect of the property in question but the ld. CWT (A) disallowed the assessee’s appeal on this point for the assessment year 1988-89. Hence the assessee being aggrieved regarding the assessment year 1988-89 has preferred the second appeal before the Tribunal which is WTA No. 51 (Cal.) of 1993 and the revenue being aggrieve by the CWT (A)’s said order regarding the assessment years 1984-85 to 1987-88, has preferred the aforesaid four appeals for the said assessment years.
4. We have heard the arguments of both the sides and perused the records as also the paper book submitted by the ld. A. R. of the assessee and also the AO’s comment submitted by the ld. D. R. by way of his written submissions.
5. We first take up the four appeals of the department which are WTA Nos. 62 to 65 (Cal.) of 1993. In all these four appeals the only issue involved pertains to the giving in full relief in respect of the valuation of the property at 6/1/2 Queen’s Park, Calcutta, for the assessment years 1984-85 to 1987-88. The ld. D. R. has supported the WTO’s assessment orders and by way of his written arguments he has submitted the Assessing Officer’s comments which too, in a way, contains argumentative part of the assessment orders as also some of the relevant facts. He has also cited CWT v. Smt. Damyanti Devi Jhunjhunwalla [1993] 203 ITR 142/71 Taxman 321 (Cal.) in his support. Against this, the ld. A. R. has supported the CWT (Appeal)’s order regarding the above four assessment years and has argued that no sale deed having been executed nor registered in favour of the lessee/assessee-company by the lessor/vendor the assessee-company has not legally become the owner of the property in question and the assessee still remains lessee/tenant of the lessor/owner. He has also argued that he assessee/lessee is still paying rent of the premises to the lessor and has taken up through page Nos. 32, 33 and 35 of his paper book emphasising that the assessee has not been shown as owner of the property in these papers in the Municipal Corporation, Calcutta and that the annual rent payable has been shown at Rs. 3,000 in the paper bearing serial No. 35 of the paper book. He has also taken up through the income-tax assessment order for the assessment year 1987-88 which is placed at page Nos. 61 to 64 in his paper book and he has specifically referred to para 3 of the said assessment order in which at page 62 of the paper book it is clearly observed that the assessee is still now under occupation of the said property by virtue of lease deed dated 20-7-1983. He has, therefore, argued that the assessee is still a lessee/tenant in the said premises which still belonged to the lessor. Smt. Swasti Choudhury and not to the assessee/lessee and as such the assessee is not assessable for the above four assessment years regarding the said property. He has cited Bhagwandas Parsadilal v. Surajmal AIR 1961 MP 237, Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888/28 Taxman 641 (SC) and CWT v. Saifuddin [1995] 214 ITR 207 (Raj.).
6. We have considered the rival contentions as also gone through the cited rulings. Smt. Damyanti Devi Jhunjhunwalla’s case (supra), cited by the ld. D. R., is clearly distinguishable from the facts of this case. In the cited case the factual situation was that the assessee already owned a 1/3rd share in the flat and had been earning income of Rs. 2,000 per month from the flat but the conveyance deed had not yet been executed nor registered in her favour though she had paid Rs. 50,686 in November 1975 for acquiring the said flat. In such a situation it was held by the Hon’ble Calcutta High Court that she had acquired a right under the agreement of purchase to let out the flat without being owner thereof by virtue of registered deed of conveyance and this right was an asset and had to be valued for the purpose of assessment under the Wealth-tax Act. But the facts of the present case quite differ from those of the cited case, no such right of letting out the flat and thereby earning rental income without being the owner by virtue of a registered conveyance deed is given to the assessee under the agreement to sell as has been given to the assessee of the cited case. In that case also the Hon’ble Calcutta High Court, following the Supreme Court decision in Nawab Sir Mir Osman Ali Khan’s case (supra) also observed that the flat in question may not belong to the assessee in the sense in which it has been explained by the Supreme Court. As such, the facts of the present case being quite different the department gets on help from Smt. Damayanti Devi Jhunjhunwalla’s case (supra). As the sale deed has not been executed nor registered by the lessor in favour of the lessee, in view of the principle of law laid down by the Hon’ble Apex Court in Nawab Sir Mir Osman Ali Khan’s case (supra) the lessor remains the owner or for that matter, the legal owner of the property in questions and the same does not yet belong to the assessee/lessee and accordingly we agree with the view taken by the Ld. CWT (A) on this point, and in consequence no interference with his appellate impugned order is called for. The departmental appeals for the assessment years 1984-85 to 1987-88 therefore have no merit and must fail.
7. Now coming to the assessee’s appeal bearing WTA No. 51 (Cal.) of 1993, the dispute as contained in the grounds of appeal revolves around the assessability of the assessee-company in respect of the property No. 6/1/2, Queen’s Park, Calcutta, on the principle of beneficial ownership as envisaged in section 53A of the T. P. Act. A perusal of the impugned order of the ld. CWT (A) shows that the ld. CWT (A) has held the assessee assessable for the said property for the assessment year 1988-89 on the analogy of the principle of equitable ownership or beneficial ownership as contained in section 53A of the T. P. Act. The ld. A. R. has argued that the amendment in section 2(m) of the WT Act has been referred to by he Ld. CWT (A) in his impugned order. There is no such amendment in section 40 of the Finance Act, 1983. He has also argued that the assessee was already in possession of the property as lessee and even after the sale agreement the assessee continued his possession as such and that the assessee did not do nay act in furtherance of the contract as is required in section 53A of the T. P. Act. He has also contended that the assessee paid sum of Rs. 25,000 under he agreement but has done nothing in furtherance of the contract. He has also contended that a person cannot be both the landlord and the tenant of a property at the same time. He has therefore argued that in view of the above the assessee is not assessable under the WT Act in respect of the said property. As against this, the Ld. D. R. relying on Smt. Damayanti Devi Jhunjhunwalla’s case (supra) has supported the impugned order of the Ld. CWT (A).
8. We have consciously considered the rival contentions. The assessee undisputedly is a closely-held company in respect whereof section 40 of the Finance Act, 1983 is applicable wherein the terms ‘assets’ as also ‘net wealth’ have specifically been defined/explained for the contextual purpose and as such the said section 40 is a complete code in itself as aptly argued by the ld. A. R. and WT Act’s section 2(m) or the said amendment therein is neither relevant nor applicable in the matter in hand. In our humble opinion, the provisions contained in Explanation 1 to section 2(m) of the WT Act which have been introduced by the amendment by the Finance Act, 1987, no doubt embrace the principle of beneficial ownership by way of deemed ownership as contained in section 27(iiia), (iiib), section 269UA (f)(i) of the IT Act but there having not been any such amendment in section 40 of the Finance Act, 1983, the said principle of beneficial ownership can hardly be applied in the matter in hand. The assessee being a closely-held company shall be governed by section 40 of the Finance Act, 1983 wherein there being no provisions providing for embracement within the fold of ‘net wealth’ the principle of beneficial ownership or for that matter the property being the subject-matter of part performance of the contract of the nature referred to section 53A of the T. P. Act, the view of the ld. CWT (A) in treating the assessee as being in exclusive possession of the property not in the capacity of a tenant but as a prospective purchaser in pursuance of sale agreement, i.e., in part performance of a contract of the nature stipulated in section 53A of the T. P. Act and in consequence being assessable in respect of the said property under the WT Act cannot be upheld. In our opinion, in view of the legal position as discussed above while dealing with the department’s four appeals, neither the assessee is the owner of the property, nor the said property can be said to be belonging to the assessee and so the assessee is not assessable for the said property under the WT Act. The impugned order in this regard is, therefore, liable to be set aside.
9. In the result, the four appeals of the department bearing WTA Nos. 62 to 65 (Cal.) of 1993 are dismissed and the assessee’s appeal bearing WTA No. 51 of 1993 is hereby allowed.