Wealth tax---

---- Net wealth ---Assessee showing value of certain property in Wealth Tax return---For subsequent years assessee claiming property gifted to her sons-- Assessee also claiming that her sons acquired property by adverse possession ---Assessee producing District Judge's order as evidence-- Inconsistent stand taken by assessee---Contradictory pleas---Decree obtained by collusion ---Assessee's claim rightly rejected---Value of property to be included in assessee's net wealth.

For the assessment years 1972-73 to 1976-77, the assessee filed Wealth Tax Returns and included the value of certain property claiming that the property belonged to her. When the return for the assessment year 1977-78 was filed, the assessee excluded the value of the property from her net wealth contending that the same had been gifted to her sons in 1956. But, the Wealth Tax Officer included the value of the said property in her net wealth. On appeal to the Appellate Assistant Commissioner, the assessee contended that by virtue of a gift-deed, she had ceased to be the owner of the property. She also claimed that her sons had acquired ownership of the property by adverse possession and in support of her contention, she produced the order passed by the Additional District Judge. The Appellate Assistant Commissioner as well as the Tribunal negatived the claim. On a reference:

Held, that the assessee had taken inconsistent stands that the property had been gifted by her to her sons anti that her sons had acquired the property by adverse possession. Both these contradictory pleas negatived the stand of the assessee. Once she had failed to establish the gift of the property to her sons she had tried to justify her stand by resorting to the plea of adverse possession by producing the order of the Additional District Judge. The order of the Additional District Judge was nothing but a collusive decree. The assessing authority had rightly not taken this factor into consideration. The Tribunal was justified in rejecting the claims of the assessee.

H.S. Shrivastava for the Assessee.

A. Adhikari for the Commissioner.

JUDGMENT

This is a Wealth Tax Reference under section 27(1) of the Wealth Tax Act, 1957, at the instance of the assessee and the following two questions of law have been referred by theTribunal for answer of this Court, which read as under:

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in not admitting the claim of the adverse possession admitted by the learned Third Additional District Judge, Jabalpur?

(2) If the answer to the above is in the affirmative, whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that Smt. Kusum Bai Jain was the owner of the property on the respective valuation dates under consideration and including the same in her net wealth?"

The brief facts giving rise to this petition are thus: The assessee disclosed the value of the property for the assessment years 1970-71 and 1971-72. There was no dispute about the ownership of this property in those two assessments. However, the dispute about the value of that property travelled before the Appellate Assistant Commissioner for the Assessment Years 1970-71 and 1971-72. By his order, dated March 25, 1974, the learned Appellate Assistant Commissioner of Wealth Tax, Jabalpur Range, Jabalpur, determined the issue of the valuation of the property only. When the returns were filed by the assessee for the Assessment Years 1972-73, 1973-74, 1974-75, 1975-76 and 1976-77, the assessee included the value of those properties in her net wealth and represented that the property belonged to her and she was the owner. The Wealth Tax Officer completed the assessments for the assessment years 1972-73 to 1976-77, by his order, dated February 23, 1979. In these assessments at the assessment stage, the assessee did not raise the question of ownership of this property before the Wealth 'fax Officer. When the returns for the Assessment Year 1977-78 was filed by the assessee on March 28, 1980, she excluded the value of those property from her net wealth contending that the same has been gifted to her sons, viz., S/Shri Narendra Kumar and Surendra Kumar, in the year 1956 The Wealth Tax Officer did not find substance in this claim of the assessee for the Assessment Year 1977-78 and included the value of the property-in her net wealth and completed the assessment on January 1, 1982. These assessments were challenged in appeal before the Appellate Assistant Commissioner.

The Appellate Assistant Commissioner considered the claim of the assessee about the ownership of this property for all the assessment years under appeal. It was contended by the assessee that by virtue of the gift-deed, dated May 31; 1956, she had ceased to be the owner of this property. The order of the Third Additional District Judge, Jabalpur, dated April 16, 1986, was produced before the learned Appellate Assistant Commissioner and it was pleaded that both the sons of the assessee, viz., S/Shri Narendra Kumar and Surendra Kumar, have acquired the ownership of this property by way of adverse possession and in support, the appellate order passed by the Additional District Judge, Jabalpur, was pressed into service and that was also negatived by the Appellate Assistant Commissioner and he dismissed the appeal.

Against the order of the Appellate Assistant Commissioner, the matter was taken up before the Tribunal and the Tribunal also confirmed the order of the Appellate Assistant Commissioner. Hence, the aforesaid questions of law have been referred at the instance of the assessee for answer of this Court.

We have heard learned counsel for the parties and perused the records. The fact that the assessee has taken inconsistent stand that this property has been gifted by her to her sons and then in the same breath, she had produced the order of the "Additional District Judge showing that both the sons acquired the property by adverse possession. Both these -contradictory pleas negative the stand of the assessee. Once she has failed to satisfy regarding gift of property to her sons somehow she tried to justify this stand by resorting to plea of adverse possession by producing the order of the Additional District Judge. The order passed by the Additional District Judge, Jabalpur, in appeal is nothing but a collusive decree. Both the sons filed suit against the father and mother though the suit was dismissed by the trial Court; but in appeal, the appellate Court reversed the findings and granted a decree of adverse possession. From the facts, it is clear that the decree was collusive one and the assessing authority has rightly not taken it into consideration and we are of the opinion that the view taken by the Tribunal appears to be justified. We answer this reference in favour of the Revenue and against the assessee.

M.B.A./1235/FCReference answered.