{"id":94720,"date":"1969-08-20T00:00:00","date_gmt":"1969-08-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ahmed-g-h-ariff-ors-vs-commissioner-of-wealth-tax-on-20-august-1969-2"},"modified":"2015-09-29T22:06:05","modified_gmt":"2015-09-29T16:36:05","slug":"ahmed-g-h-ariff-ors-vs-commissioner-of-wealth-tax-on-20-august-1969-2","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ahmed-g-h-ariff-ors-vs-commissioner-of-wealth-tax-on-20-august-1969-2","title":{"rendered":"Ahmed G.H. Ariff & Ors vs Commissioner Of Wealth Tax, … on 20 August, 1969"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Ahmed G.H. Ariff & Ors vs Commissioner Of Wealth Tax, … on 20 August, 1969<\/div>\n
Equivalent citations: 1971 AIR 1691, \t\t 1970 SCR (2)\t 19<\/div>\n
Author: A Grover<\/div>\n
Bench: Grover, A.N.<\/div>\n
           PETITIONER:\nAHMED G.H. ARIFF & ORS.\n\n\tVs.\n\nRESPONDENT:\nCOMMISSIONER OF WEALTH TAX, CALCUTTA\n\nDATE OF JUDGMENT:\n20\/08\/1969\n\nBENCH:\nGROVER, A.N.\nBENCH:\nGROVER, A.N.\nSHAH, J.C. (CJ)\nRAMASWAMI, V.\n\nCITATION:\n 1971 AIR 1691\t\t  1970 SCR  (2)\t 19\n CITATOR INFO :\n C\t    1991 SC2023\t (5)\n\n\nACT:\nWealth\tTax Act (27 of 1957), ss. 2(e), (m) and\t  7(1)-Right\nto   receive   share  from   wakf-alal-aulad-Whether   asset\nassessable  to wealth tax-\"If sold in open  market\"  meaning\nof.\n\n\n\nHEADNOTE:\nA  hanafi  Muslim created a  wakf-alal-aulad  and  appointed\nhimself\t as  the sole Mutwalli and provided that  after\t his\ndeath  his widow and sons would act as\tMutawallis  jointly.\nThe wakf was for the benefit of the settler's wife, children\nand  their  descendants,  and they were each to\t be  paid  a\nspecified  share of the net monthly income of the  property.\nThe  ultimate benefit in the case of complete  intestacy  of\nthe  descendants  of  the  settler  was\t reserved  for\tpoor\nmusalmans of sunni community deserving help  On the question\nwhether the right of the assessee who were the beneficiaries\nunder the deed of wakf, to receive a specified\tshare of the\nnet income from the estate, was an asset assessable to weath\ntax, this Court,\nHELD:  (i)  The right in question was assessable  to  wealth\ntax.\n    (i) \"Property\" is a term of widest import and subject to\nany  limitation which the context may require, it  signifies\nevery  possible interest which a person can clearly hold  or\nenjoy. [25 C--D]\n    The\t definition of \"assets\" in s. 2(e) and that of\t\"net\nwealth\"\t  in  s. 2(m) of the Wealth Act\t were  comprehensive\nprovisions and all assets were included in the net wealth by\nthe  very  definition.\t Therefore, when s.  3\timposed\t the\ncharge\tof  wealth  tax on the\tnet  wealth  it\t necessarily\nincluded in it every description of property of the assessee\nmovable\t and immovable, barring the exceptions stated in  s.\n2(e) and other provisions of the Act.  There is no reason or\njustification  to give any restricted: meaning to  the\tword\n\"assets\" as defined by s. 2(e) of the Act when the  language\nemployed  shows that it was intended to include property  of\nevery description. [25 H; 26 A--B]\n    On a proper construction of the relevant clauses in\t the\nwakf  deed,  it must be held that the aliquot share  of\t the\nincome\tprovided for the beneficiaries was not meant  merely\nfor   their  maintenance  and  support.\t But  even  on\t the\nassumption  that  it  was so intended  or  to  preserve\t the\nvalidity of the deeds it should be so construed the right to\nthe share of the income would certainly be asset within\t the\nmeaning of s. 2(e) and would be liable to be included in the\nnet wealth of the assessee. [26 B---C]\n    Vidya Varuthi v. Balusami Ayyar, 48 I.A. 302, 312, Abdul\nKarim Adenwalla v. Rahimabai, 48 Bom. L.R. 67, Commissioner,\nHindu  Religious  Endowments,  Madras  v.  Shri\t Lakshmindra\nThirtha Swamiar of Sri Shirur Mutt.<\/a> [1954] S.C.R. 1005, 1019\nand   Commissioner  of\tInland Revenue v.  Crossman,  [1937]\nA.C. 26, referred to..\n20\n     Commissioner  of Wealth Tax, Bombay City v.  Purshottam\nN.Amersey & Anr. 71  I.T.R. 180, approved.\n    (ii)  When\tthe statute uses the words \"if sold  in\t the\nopen  market\"  it does not contemplate actual  sale  or\t the\nactual state of the market, but only enjoins that it  should\nbe  assumed that there is' an open market and  the  property\ncan be sold in such a market and on that basis the value has\nto  be\tfound  out.   It is a  hypothetical  ease  which  is\ncontemplated  and the Tax Officer must assume that there  is\nan open market in which the asset can be sold. [26 E--F]\n    (iii) The contention, that the right to receive a  share\nof the income was a mere right to an annuity where the terms\nand conditions relating thereto precluded the commutation of\nany  portion  into a lump sum grant must be  rejected.\t The\nword \"annuity\" could not be given its popular and dictionary\nmeaning, but should be given the signification which it\t has\nassumed\t as a legal term owing to  judicial  interpretation.\nWhere  the legislature uses a legal term which has  received\njudicial  interpretation courts must assume that  the  terms\nhas  been used in the sense in which it has been  judicially\ninterpreted. [26 G--H; 27 A--B]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL  APPELLATE  JURISDICTION: Civil Appeals Nos.  2129  to
\n2132 of 1968.\n<\/p>\n
    Appeals from the judgment and order dated  December\t 4,’
\n1964  of the Calcutta High Court in Tax Matters Nos. 69,  62
\nand 64 of 1963.\n<\/p>\n
    A.K.  Sen,\tS.K.  Hazare and  P.K.\tMukherjee,  for\t the
\nappellants (in all the appeals).\n<\/p>\n
    B.\tSen, S. A. L. Narayana Rao and R.N.  Sachthey,\t for
\nthe respondent (in ‘all the appeals).\n<\/p>\n
The Judgment of the Court was delivered by
\n    Groper, J.\tThese appeals by certificate from a judgment
\nof  the Calcutta High Court involve a common  but  important
\nquestion,  namely,  whether  the right\tof  an\tassessee  to
\nreceive\t a specified share of the net income from an  estate
\nin  respect of which Wekf-alal-aulad has been created is  an
\nasset assessable to Wealth Tax.\n<\/p>\n
  By a deed dated November 19, 1928 as modified by a deed of
\nrectification dated July 5, 1930 one  Golam  Hossain   Kasim
\nAriff,\ta  muslim  governed by the  Hanafi   School  of\t the
\nMohammadan  Law created a wakf in respect of his  properties
\nin Noormul Lohia Lane and Armenian Street in Calcutta.\t The
\nsettler appointed himself as the sole Mutwalli for the\tterm
\nof  his\t life and provided that after his  death  his  widow
\nAisha  Bibi  and his  sons would act as\t Mutwallis  jointly.
\nThe  settler  died on January 1, 1937.\tHe left\t behind\t his
\nwidow  Aisha  Bibi  and three tons who\tare  the  appellants
\nbefore\tthis Court.  The wakf created was of the  nature  of
\nWakf-alal-aulad for the benefit of the settler’s wife,
\n21<\/span>
\nchildren  and their descendants.  The extent of the  benefit
\nconferred on them would appear from clause 5 of the deed  of
\nwakf as modified:\n<\/p>\n
\t\t    “5.\t After payment of all necessary\t out
\n\t      goings   such   as   establishment    charges,
\n\t      collections  charges, revenue taxes, costs  of
\n\t      repairs,\tlaw charges and other  expenses\t for
\n\t      the  upkeep  and management of the  said\tWakf
\n\t      property,\t the  Mutwalli\tor  Mutwallis  shall
\n\t      apply the net income of the said Wakf property
\n\t      as follows, viz.:\n<\/p><\/blockquote>\n
\t\t  (a) In payment to me during the term of my
\n\t      life  of one-fifth of the said net  income  by
\n\t      monthly instalments.\n<\/p><\/blockquote>\n
\t\t  (b)  In payment to each of my sons  during
\n\t      the respective terms of their lives  one-sixth
\n\t      of the said net income by monthly instalments.\n<\/p><\/blockquote>\n
\t\t  (c)  In  payment  to my  wife\t Aisha\tBibi
\n\t      during  the term of her life one tenth of\t the
\n\t      said net income by monthly instalments.
\n\t      The moneys payable as aforesaid to such of  my
\n\t      sons as are minors shall until they attain the
\n\t      age  of  majority\t be  respectively   invested
\n\t      (after   defraying  the\texpenses  of   their
\n\t      maintenance   and\t  education)   in     proper
\n\t      securities or in landed property in   Calcutta
\n\t      and such securities or property shall be\tmade
\n\t      over  to the  said sons on their\trespectively
\n\t      attaining the age of majority.”\n<\/p><\/blockquote>\n
The  ultimate benefit in the case of complete  intestacy  of
\nthe  descendants  of  the  settlor  was\t reserved  for\tpoor
\nmusalmans of Sunni community deserving help.
\n    The\t appellants  who are the  beneficiaries\t  under\t the
\ndeed of wakf were paying income tax on the amount which\t was
\nbeing  received\t by  them in terms of  that  deed  from\t the
\nMutwalli.   In the year 1957 the Wealth Tax Act 27 of  1957,
\nhereinafter  called  the Act, came into force.\t During\t the
\nassessment years 1957-58 and 1958-59 the appellants were not
\nonly  assessed\tto  income  tax in  respect  of\t the  income
\nreceived by them from the wakf estate but were also assessed
\nto  Wealth tax by the Wealth Tax Officer on the\t basis\tthat
\nthey had a share in the wakf estate.  The total value of the
\nimmovable  property belonging to the wakf estate was  valued
\nat  20 times the annual municipal valuation and 16th of\t the
\nvalue\tof  the\t immoveable  property  along   with    other
\nproperties  was taken to be the net wealth of each assessee.
\nAppeals were  taken to the Appellate Assistant\tCommissioner
\nof Wealth Tax but these were dismissed.\t There were  further
\nappeals\t to  the  Income tax  Appellate\t Tribunal  where  no
\ndispute was  raised as\tindeed\tit could not be raised\twith
\nregard to the validity of the deed of wakf.\n<\/p>\n
22<\/span><\/p>\n
It  was\t held  that the right of the sons  of  the  wakf  to
\nreceive\t a  share  of  the rents and  profits  of  the\twakf
\nproperty  was property or an interest in property and as  it
\nwas  not  limited in enjoyment to a period of six  years  it
\nfell within the definition of the  term “assets” as  defined
\nby  s.\t2(e) of the Act.  The contention of  the  appellants
\nthat  the right of the beneficiaries under the deed of\twakf
\nwas  a mere right to an annuity as mentioned in s.  2(e)(iv)
\nand  was, therefore, not an asset assessable to\t wealth\t tax
\nwas  rejected.\tThe  third argument which  had\tbeen  raised
\nbefore\tthe  Tribunal that the allowances  under  assessment
\nwere  payable  to the  beneficiaries by way  of\t maintenance
\nwere  not  transferable\t under s. 6(dd) of the\tTransfer  of
\nProperty  Act  and therefore they had no market\t value,\t for
\ninclusion in the net wealth was also refuted. It was pointed
\nout that the right to maintenance was not one of the  assets
\nmentioned in s. 5 which alone entitled an assessee to  claim
\nexemption  in respect of certain assets.  The  Tribunal\t did
\nnot  find it possible to hold on the facts of the case\tthat
\nthe amounts in dispute were receivable by the  beneficiaries
\nas maintenance under the terms of the wakf.  As regards\t the
\nquantum of valuation a direction was made that the value  of
\nthe   assessee’s  life\tinterest may be capitalised  on\t the
\nbasis  of the valuation table set out in  Park’s  Principles
\nand  Practice of Valuations  taking  the  rent\tsecurity  at
\n6%.\n<\/p>\n
    On\tapplications for referring the question of law,\t the
\nfollowing  common  question was referred to the\t High  Court
\nunder s. 27 of the Act:\n<\/p>\n
\t\t    “Whether on the facts and  circumstances
\n\t      stated the right of the assessee to receive  a
\n\t      specified\t share\tof the net income  from\t the
\n\t      Wakf Estate is an asset the capitalised  value
\n\t      of which is assessable to Wealth-tax?”\n<\/p><\/blockquote>\n
The  High Court negatived the contentions of the  appellants
\nthat the right to receive a definite share of the net income
\nfrom  wakf property did not fall within the meaning  of\t the
\nword  “assets” as defined by s. 2(e) of the Act or  that  it
\nwas  a mere right to an annuity which under  the  Mohammedan
\nLaw could not be commuted into a lumpsum.  It was held\tthat
\nthe  fight of each assessee was to receive an aliquot  share
\nof  the\t net income of the properties which  were  made\t the
\nsubject\t  matter  of  the  wakf\t  and  there  was  a   clear
\ndistinction  between  an  aliquot share\t of  income  and  an
\nannuity.   The High Court was of the view that even  if\t the
\nasset of the nature under consideration was non-transferable
\nand  could  not be sold in the open market it could  not  be
\nsaid  that such an asset had no value.\tFor the\t purpose  of
\nthe  Act the Wealth Tax Officer must proceed to value it  as
\nif it was an asset which was saleable in the market and that
\nwould  depend\ton  actuarial valuation.  The  question\t was
\nconsequently  answered in the affirmative and in  favour  of
\nthe revenue.\n<\/p>\n
23<\/span><\/p>\n
\t\t  The  definition  of the word\t“assets”  as
\n\t      given in s. 2 (e) of the Act to the extent  it
\n\t      is material is in the following terms:\n<\/p>\n
\t\t    (e)\t  “assets”  includes   property\t  of
\n\t      every   description, movable or immovable\t but
\n\t      does  not\t include–\n<\/p>\n
\t\t    (iv) a right to any annuity in any\tcase
\n\t      where   the  terms  and  conditions   relating
\n\t      thereto\tpreclude  the  commutation  of\t any
\n\t      portion thereof into a lump sum grant;\n<\/p>\n
\t\t    (v)\t any interest in property where\t the
\n\t      interest\tis  available to an assessee  for  a
\n\t      period not exceeding six years ;”\n<\/p>\n
“Net  wealth” is defined by section 2(m). Section 3  is\t the
\ncharging  valuation date of every individual etc. Section  4
\ngives  the financial year a tax in respect of the net wealth
\non the corresponding valuation date of every individual etc.
\nSection\t 4  gives  the assets which have to be\tincluded  in
\ncomputing   the\t net  wealth. Section 5 gives  those  assets
\nwhich are exempt from and are not to be included in the\t net
\nwealth of the assessee. Section 7 (1) provides that value of
\nany asset other than cash shall be estimated to be the price
\nwhich,\tin the opinion of the Wealth Tax Officer,, it  would
\nfetch, if  sold in the open market,  on the valuation date.
\n    It\tis  to be essentially decided whether the  right  to
\nreceive an aliquot share of the net income of the properties
\nwhich  were  made the subject matter of the  wakf  would  be
\ncovered by the definition of “assets” within the meaning  of
\ns.  2(e) of the Act.  There can be no difficulty if  such  a
\nright can be  regarded to be  property giving that word\t the
\nwidest meaning as is  contemplated by  the language employed
\nin the aforesaid clause.  The principal argument of Mr. A.K.
\nSen for the appellants is that the right to receive a  share
\nof the income under a deed creating wakf-alal-aulad can,  by
\nno stretch of reasoning,  be  regarded\tto fall\t within\t the
\nmeaning\t of  the  word\t“property”  even  in  its  wide\t and
\nextended sense.\t He has referred to the incidents of such  a
\nright  with  particular\t reference  to\tthe  Mohammedan\t Law
\nrelating  to wakf.  That law owes its origin to a rule\tlaid
\ndown  by  the Prophet of Islam; and means “the tying  up  of
\nproperty  in  the  ownership of God  the  Almighty  and\t the
\ndevotion  of the profits for the  benefit of human  beings.”
\nOnce it is declared that a particular property is wakf,\t the
\nright  of  the\twakf is extinguished and  the  ownership  is
\ntransferred   to  the  Mutawalli  (vide\t Vidya\tVaruthi\t  v.
\nBalusami Ayyar(1).  Wakfs could be divided into two classes:\n<\/p>\n
(i)  public and (ii) private. A private wakf is one for\t the
\nbenefit of the (1) 481.A. 302 atp. 312.\n<\/p>\n
24<\/span><\/p>\n
settlor’s  family and his descendants.\tIt is  called  Wakf-
\nalal-aulad.  -Before  the enactment of\tthe  Mussalman\tWakf
\nValidating  Act 1913, a wakf, exclusively for the benefit of
\nthe   settlor’s\t   family,  children  and   descendants\t  in
\nperpetuity,   was  invalid.  It\t was, however, valid if\t the
\nproperty was given in substance to charitable uses.  Section
\n3  of  the aforesaid Act declared it lawful  for   a  person
\nprofessing the Mussalman faith to create a wakf which in all
\nother respects was in accordance with the provisions of\t the
\nMussalman law, for the following among other purposes :–\n<\/p>\n
\t\t     “(a)  for the maintenance\tand  support
\n\t      wholly  or partially of his family,   children
\n\t      or  descendants,\tand\n<\/p><\/blockquote>\n
\t\t     (b) where the person creating a wakf is
\n\t      a\t  Hanafi   Mussalman,  also  for   his\t own
\n\t      maintenance and support during his lifetime or
\n\t      for the payment of his debts out of the  rents
\n\t      and profits of the property dedicated;
\n\t\t     Provided  that the ultimate benefit  in
\n\t      such cases expressly or impliedly reserved for
\n\t      the poor or for  any other purpose  recognised
\n\t      by the Mussalman law as a religious, pious  or
\n\t      charitable purpose of a permanent character.”\n<\/p><\/blockquote>\n
As  mentioned  before,\tthe moment a wakf  is  created,\t all
\nrights\tof  property pass out of the Wakif and vest  in\t the
\nAlmighty.   Therefore,\tthe Mutawalli has no  right  in\t the
\nproperty belonging to the wakf.\t He is not a trustee in\t the
\ntechnical  sense,  his\tposition  being\t merely\t that  of  a
\nsuperintendent\tor  a manager. A  Mutawalli  has  no  power,
\nwithout\t the permission of the court, to mortgage,  sell  or
\nexchange  wakf\tproperty or any part thereof unless  he\t  is
\nexpressly  empowered by the deed of wakf to do so: (ss.\t 202
\nand 207, Mulla’s Principles of Mahomedan Law, 16th Edn.)
\n    In Abdul Karim Adenwalla v. Rahimabai(1), a\t distinction
\nwas  made  between a settlor belonging to  the\tHanafi\tsect
\nreserving  for\this own maintenance and support\t during\t his
\nlifetime the income of the trust property and has  reserving
\nfor  his  absolute use income of the whole of  the  property
\nduring\this  lifetime.\tIt was ‘pointed out  that  a  Hanafi
\nMussalman was not permitted to follow the latter course\t and
\nit was only when he reserved the income for his\t maintenance
\nand  support  that  the\t provisions  of\t the Mussalman\tWakf
\nValidating Act, 1913  would not be offended, There would  be
\na  difference  in  law between these two  provisions;  if  a
\nsettlor reserved to himself income for his own\t maintenance
\nand support that would not be transferable as property under
\nthe  Transfer  of Property Act nor would  it  be  attachable
\nunder  the provisions of the Civil Procedure Code.   If\t he,
\nhowever,  reserved for himself a life interest, s. 6 of\t the
\nTransfer of Property Act
\n(1) 48 Bom. L.R. 67.\n<\/p>\n
25<\/span><\/p>\n
and s. 60 of the Code with regard to the non-transferability
\nand  non-liability to an attachment would nor be  attracted.
\nThe  crux of the matter, according to Mr. Sen, is  that\t the
\naliquot\t share\tof income under the deeds  executed  in\t the
\npresent case was reserved for the maintenance and support of
\nthe wakf and other beneficiaries during their lifetime.\t  It
\nis pointed out that if the provisions contained in cl. (5  )
\nof the deed of wakf were not to be read in that manner,. the
\ndeed would be rendered void a result which has to be avoided
\nby  the\t  courts.  It is thus contended that the  right,  in
\nquestion,  is a right to future maintenance measured by\t the
\naliquot\t part of the income and it is neither  partible\t nor
\nalienable,  and\t is  one which is  wholly  personal  to\t the
\nbeneficiary.  It lacks the basic attributes of property.
\n    Now\t “property”  is\t a term of  the\t widest\t import\t and
\nsubject to any limitation which the context may require,  it
\nsignifies every possible interest which a person can clearly
\nhold or enjoy.\tThe meaning of the word “property” has\tcome
\nup  for\t examination before this Court in a number of cases.
\nReference  may be made to one of them in which the  question
\narose  whether\tMahantship  or\tShebaitship  which  combines
\nelements of office and\tproperty would fall within the ambit
\nof  the word “property” as used in Article 19(1)(f)  of\t the
\nConstitution.  It was  observed\t in the Commissioner,  Hindu
\nReligious  Endowments,\tMadras v. Shri\tLakshmindra  Thirtha
\nSwamiar of Sri Shirur Mutt<\/a>(1) that  there was no reason\t why
\nthat   word  should  not  be  given  a\tliberal\t and’\twide
\nconnotation  and  should not be\t extended  to\tthose\twell
\nrecognised  types  of interests which had  the\tinsignia  or
\ncharaceristics of proprietary right. Although Mahantship was
\nnot heritable like the ordinary property, it was still\theld
\nthat  the  Mahant was entitled to claim protection  of\tArt.
\n19(1)  (f)  of\tthe  Constitution.   It\t is  stated  in\t the
\nHalsbury’s  Laws of England, Vol. 32 3rd Edn. page 534\tthat
\nan annuity (which is a\tcertain sum  of money payable yearly
\neither\tas  a personal obligation of the grantor or  out  of
\nproperty not consisting exclusively of land) can be an\titem
\nof  property  separate\tand  distinct  from  the  beneficial
\ninterests  therein  and from ‘the funds and  other  property
\nproducing  it\t  is property capable of passing on a  death
\nand  can  be  separately valued for the\t purpose  of  estate
\nduty.\n<\/p>\n
    The\t only direct case on the point under   consideration
\nis  a decision of the Bombay High Court in  Commissioner  of
\nWealth\tFax,  Bombay  City  v.\tPurshottam  N.\tAmersey\t and
\nAnother(2).  There the deed of settlement provided that\t the
\ntrustees  shall\t apply he net income from the fund  for\t the
\nsupport,  maintenance and advancement in life and  otherwise
\nfor the benefit of the settlor and is wife etc.\t It was held
\nthat the definition of “assets” in s. 2(e) and that of\t“net
\nwealth” in s. 2(m) were comprehensive provi-
\n (1)  [1954] S.C.R. 1005, 1019.\t\t\t     (2)  71
\nI.T.R. 180.\n<\/p>\n
 CI\/70-3
\n26<\/span>
\nsions and all assets were included in the net wealth by\t the
\nvery definition. Therefore, when s. 3 imposed the  charge of
\nwealth\ttax on the net wealth it necessarily included in  it
\nevery  description of property of the assessee, movable\t and
\nimmovable,  barring  the exceptions stated in s. 2  (e)\t and
\nother  provisions of the Act. We are in\t entire\t concurrence
\nwith that view.\t There is no reason or justification to give
\nany restricted meaning to the word “asset” as defined by  s.
\n2(e)  of the Act when the  language  employed shows that  it
\nwas intended to include property of every description.\tOn a
\nproper\tconstruction of the relevant  clauses in   the\twakf
\ndeed  we  are not satisfied that the aliquot  share  of\t the
\nincome\tprovided for the beneficiaries was meant merely\t for
\ntheir  maintenance and support.\t But even on the  assumption
\nthat  it was so intended or to preserve the validity of\t the
\ndeeds  it should be so construed the right to the  share  of
\nthe income would certainly be an asset within the meaning of
\ns. 2(e) and would be liable to be included in the net wealth
\nof the assessee.\n<\/p>\n
    Mr.\t Sen has laid emphasis on the language of s. 7 (1  )
\nof  the Act and has contended that the right to a  share  in
\nthe  income  is not capable of any valuation and  the  price
\nwhich  it would fetch if sold in the open market, could\t not
\npossibly  be   ascertained.  Such  an  argument\t was   fully
\nexamined  in  the  Bombay  case(1) in which the\t High  Court
\nreferred  to the provisions of the English  statutes,  which
\nwere  in  pari\tmateria as also\t decisions   given   by\t the
\nEnglish\t Courts including the one by the  House\t of   Lord,’
\n(Commissioner  of Inland Revenue v. Crossman) (2).   It\t has
\nbeet  rightly  observed\t by the High  Court  that  when\t the
\nstatute uses the words “if sold in the open market” it\tdoes
\nnot  contemplate  actual  sale or the actual  state  of\t the
\nmarket,\t but  only  enjoins  that I should be  assumed\tthat
\nthere is an open market and the property can be sold in such
\na  market and on that basis, the value has to be found\tout.
\nIt  is a hypothetical case which  is  contemplated  and\t the
\nTax  Officer  must assume that there is an  open  market  it
\nwhich the asset can be sold.\n<\/p>\n
    A  faint  attempt  was  made  to  invoke  the  exception
\ncontained in s. 2(e) by suggesting that the right to receive
\na share of the income was a mere right to an  annuity  where
\nthe   terms  and conditions relating thereto  precluded\t the
\ncommutation of any portion into a lump sum grant.  The\tHigh
\nCourt  in the judgment under appeal dwelt at length  on\t the
\ntrue  meaning  and import of the  expression  “annuity”\t and
\nnegatived  that\t suggestion.  The burden of the argument was
\nand  is that the word “annuity” should be given its  popular
\nand  dictionary meaning and not the signification  which  it
\nhas  assumed  as  a  legal  term  owing\t to  judicial  inter
\npretation.   Such a contention has only to be stated  to  be
\nrejected
\n(1) 71 I.T.R.180.\t\t\t    (2) (1937)\tA.C.\n<\/p>\n
26.
\n27<\/span>
\nbecause it is well settled that where the  legislature\tuses
\na   legal term which has received  judicial  interpretation,
\nthe  courts must assume that the term has been used  in\t the
\nsense in which it has been judicially interpreted.
\n    For\t the reasons given above, the appeals fail  and\t are
\ndismissed with costs. (One hearing fee.)
\nY.P.\t\t\t\t\t  Appeals dismissed.\n<\/p>\n
28<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Ahmed G.H. Ariff & Ors vs Commissioner Of Wealth Tax, … on 20 August, 1969 Equivalent citations: 1971 AIR 1691, 1970 SCR (2) 19 Author: A Grover Bench: Grover, A.N. PETITIONER: AHMED G.H. ARIFF & ORS. Vs. RESPONDENT: COMMISSIONER OF WEALTH TAX, CALCUTTA DATE OF JUDGMENT: 20\/08\/1969 BENCH: GROVER, A.N. BENCH: […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-94720","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nAhmed G.H. 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