(a) Wealth Tax Act (XV of 1963)---

----S.2(16)---Netwealth ---expressionbelonging"---Connotation-- "Belonging" includes the concept of "ownership

(b) Wealth Tax Act (XV of 1963)---

----S.2(16)---"Net wealth"---Possession of property---Inclusion of such property in net wealth --Mere possession or joint possession unaccompanied Day right to be in possession err ownership of property was mot enough to bring such property within the definition of "Net wealth"

(c) Wealth Tax Act (XV of 1963)---

---Ss.2(m) & 2(16)---Registration Act (XVI of 1908). S.49---Net wealth- Assessment years 1994-95 to 1996-97 --Plot was allotted and transferred by the Development Authority through the Federal government Employees Housing Foundation to the assessee---Value of the plot was declared equivalent to the price: paid by the assessee---Assessing Officer adopted market value of the plot after considering the prices of the plots fetched by other allottees who sold their plots in open market ---Assessee contended that plot was allotted on the basis of an agreement dated 27-2-1994 for construction of a house thereon and according to the agreement, the right of ownership and user in and over the plot still vested in the Capital Development Authority and thus, the assessee could neither be said to hold the plot in his name nor he had any title or right in it as no sale-deed was executed by the Authority in favour of the assessee, Assessing Officer, thus, had erroneously found that right of ownership or the plot was total and complete whereas finding was in direct conflict with the agreement executed between the assessee and the Authority---Validity---Provisions of Registration Act. 1908 required that the sale of immovable property must be through registered document Section 49, Registration Act, 1908 stipulated that unless such document was registered the right. title or interest of the sell to the property was not extinguished nor that of purchaser created-- Requirement of law had to be fulfilled to lend legality to such transfer -- Assessee, therefore, was not the legal owner of the plot in question as the title therein was not transferred to the assessee and the same could not be included in "net wealth" of the assessee---Assessee being an individual and all the movable and immovable properties held by him were included in the assets for the purpose of wealth tax, therefore, money invested for acquiring the plot was to be included in "net wealth' and not the value of plot which did not belong to the assessee---Assessing Officer was directed by the Tribunal not to include the market value of plot in the "net wealth" of the assessee but to include only the amount of investment made by him for acquiring the plot.

Budhan Singh v Nabi Bakhsh and another AIR (sic) (S.C. India) -1880; Marudakkal v Arumugha AIR 1958 Mad. 225; Law Terms and Phrases, p.435: Webster's New 20th Century Dictionary 2nd Edn; 1997 PTD (Trib.) 337; Black's Law Dictionary, Fifth Edn.. p.141; Webster's Dictionary; Aiyar's Law Lexicon of British India, 1940 Edn., p:128: PLD 1957 Dacca 448; Abdullah Bhai v. Ahmed Din PLD 1964 SC 106; C.I.T. v. ,Mir Nawab Barkat Ali Khan (H.C.) 1994 Tax LR 90; RB Judamall Kuthalia v. C.I.T. (S.C.) (1971) 82 ITR 570; C.I.T. v. Ashland corporation (H. C.) (1982) 133 IM 55; Kalarani v. C I.T. (H.C.) (1981) 130 ITR 321 (PHC) and C.I.T. Wealth Tax Delhi-I v. Smt. Promilla Bali (1983) 141 ITR 942 ref.

Raja Muhammad Amir Ahmed Khan v. Municipal Board of Sitapur and another AIR 1965 SC 1923; (1975) 99 ITR 370: (1978) 112 ITR 969 and PLD 1957 Dacca 374 distinguished.

Bachu Bai F.E Dinshaw v.C.I.T.1967 PTD 170; B.D) Avari v CIT 1989 PTD 670; C.I.T. v. Hans Raj Gupta (1982) 137 ITR 195- CIT. v. Zorostrian Building Society Limited(1976) 102 ITR 195; C.I.T. v Sultan Brothers (Pvt.) Limited (1983) 142 ITR 249; C.LT. v. Gangu Properties Limited (1970) 77 ITR 637; (Late) Nawab Sir Mir Osman Ali Khan vC .W. T. (1986) 162 ITR 888 and 1996 PTD (Trib.) 905 ref.

Sikandar HayatKhan for Appellant.

Waqar Ahmed, D.R. for Respondent.

Date of hearing: 16th May, 1998.

ORDER

RASHEED AHMED SHEIKH (JUDICIAL MEMBER).---These three appeals at the behest of the Department are directed against a consolidated order dated 8-10 1997 passed by CIT (A) Zone-I. Islamabad in respect of assessment years 1994-95 to 1996- 97.

Out of controversy of the parties a precise question, as to whether the plot allotted and transferred by the Capital Development Authority (C.D.A.), through the Federal Government Employees Housing Foundation, is includable in the assessee's net wealththin the meaning of section 2 (m) of the Wealth fax Act, 1963. has arisen for ourconsideration.

Relevant facts for disposal of this question are that the assessee respondent was allotted a Plot measuring 600 sq. yards in Section I-8/4, Islamabad by tile C D A through Federal Government Employees Housing foundation, for consideration of RS 1,25,000 in 1990 The value of this plot was declared at Rs 1,25,000 in prescribe column of wealth tax return "Immovable Assets" The Assessing Officer after having perused the facts of the case. observed that as these plots are sold in the open market, the value of the plot declared by the assessee was extremely low He thus concluded that the assessee being a rightful owner of the said plot and it being free from any encumbrances, its value should be adopted in view of prevailing, price in the market. Accordingly, the value of the plot was adopted at Rs.20 00000 for assessment year 1994-95. at Rs. 22,00,000 for assessment yeah 1995-96 and at Rs 24,00,000 for assessment year 1996-97 by the Assessing Officer, after consid6ring the price of the plots fetched by other allottees who sold their plots to the open market

When the issue regarding ownership and adoption of higher value of the plot came up for adjudication before the first appellate authority it resorted to set aside the combined wealth tar assessment order for de novo consideration after reproducing the assessee's written arguments as well as the findings of the wealth tax officer in the appellate order This prompted the department to assail the Appeal Commissioner Order before the Tribunals

We do lot subscribe to the contention raised that the plot allotted by the C.D.A. does not belong to the assessee on the valuatio.1 date. Nevertheless. Mr. Sikandar Hayat Khan, the learned A.R. of the assessee respondent explained that the C.D.A had allotted the plotthe assessee on the basis of an agreement dated 27-2-1994 for construction of a house thereon. Para. 2 of the agreement was cited to contend that the rights of ownership and user in and over the plot still vest absolutely ins the authority In consequence thereof the assessee can neither be said to hold the plot in his name nor has any title or right in it. The expression held in section 4 of the Wealth Tax Act has not been defined. Thus, its meaning has t:, be gathered from other relevant law where it has been defined He stated that the expression held connotes possession by legal title as has been observed in re: (Budhan Singh v Nabi Bakhsh and another AIR (sic) (S.C India) 1880: He added that the expression held and the word possession in section 14(1) of the Hindu succession Act. 1956, mean one and the same thing a Marudahkal v Arumugha AIR 1958 Mad. 225. Similarly in law Terms and Phrases (page 435) the expression held in section 9 of the U.P. Zanindari Abolition and Land Reforms Act connotes the existence of a right or title in the holder. He also mentioned that the other words used are and belonging to" and that-- expression certainly refers to the owners, The dictionary meaning of the word held is either a lawful holding or even a holding without any semblance of a right to such holding. Reference to Webster's 20th Century New Dictionary (2nd Edition.) was made wherein the expression held means to possess by legal title.

Proceeding further, the learned A,R contended that after payment of ail sums relating to the plot and completion of a house thereon, the authority shall execute a registered sale deed transferring its rights and title in the said plot in favour of the purchaser or his/her heirs or successors and any subsequent transfer of which propriety rights had been transferred to the purchaser shall take place under intimation to the Authority. In this regard, para. 9 of the agreement was quoted by him. Thus, the Assessing Officer has erroneously, held that right of ownership of the plot is total and complete whereas such finding of him is in direct conflict with paras. 2 and 9 of the agreement executed between the assessee and the Authority. In support of the contention, that as the rights and title in the plot continue to vest in the authority, it cannot be said that the assessee holds the plot as its owner, reliance was placed upon a Pakistani case law in re: 1997 PTD 337 (Trib.) wherein it was held that ownership of the plot does not belong to the assessee until conveyance deed is executed.

Before delivering out judgment on the point that the plot in question does belong to the assessee and not to the C.D.A. for the purpose of charging wealth tax, section 3 of the Wealth Tax Act proclaims that the charge of wealth tax is on the net wealth of the assessee on the relevant valuation date. The term "net wealth" is defined under section 2(m) of the Wealth Tax Act. This term enumerates that the amount by which the aggregate of all the assets belonging to the assessee on, the valuation date including assets required to be included in his net wealth, is ill excess of the aggregate value of the debts owned by the assessee on the valuation date. However, certain debts, as referred to in sub-clauses (i) and (ii) of clause (m) of this section, have been excluded from the ambit of determining aggregate value of the debt owed.(underlined by us ).s

The significant words used in clause (m) of section 2, around which the whole controversy revolves, are "assets" and "belonging to the assessee" arid not the word held", as used in section 4(1)(a) of the Wealth Tax Act, upon which the learned A.R., has made a lot of emphasis. According to action 2(e)(i) of the Wealth Tax Act, the word "assets" includes property of every description, moveable or immovable. in the case of anindividual and a Hindu undivided family. Certain exceptions are also given in thisclause which do not fall within the definition of moveable or immoveable assets for the purposed of charging wealth tax thereon.

Coming to the word "belong", as per the Black's Law Dictionary, Fifth Edition page 141, it means to appertain to; to be the property of; to be a member of; to be appropriate, to own. In Webster's Dictionary "belonging to" is explained as meaning, inter alia, to be owned by, be in possession of. It has been said. in Aiyar's Law Lexicon of British India, 1940 Edition, page 128, that the property belonging to a person has two meanings: (1) ownership; (2) the absolute right of user.So, whenever the expression 'belong" or "belonging to" is used in the documents or agreements, its meanings are not only confined to denote an absolute title but also possession of an interest. This expression also came under consideration before apex Court of India in re; Raja Muhammad Amir Ahmed Khan v. Municipal Board of Sitapur and others; cited .as AIR 1965 SC 1923. It was, accordingly, held as under:--

"Though the word 'Belonging' no doubt is capable of denoting an absolute title, it is nevertheless not confined to connoting that sense. Even possession of an interest less than that of full ownership could be signified by that word ..The precise sense which the word was meant to convey can, therefore, be gathered only by reading the document as a whole and adverting to the context in which it occurs."

The same view was subsequently confirmed by the Indian decisions, in the cases reported as t (1975) 99 ITR 370 and (1978) 112 ITR 969.

Besides, the august High Court of Dacca (the then East Pakistan) has also held in the cases reported as PLD 1957 Dacca 374 and PLD 1957 Dacca 448 that the word 'belonging" includes not only properties immoveable or immoveable in possession but also properties in which the applicants have some interest.

It is pertinent to mention that law of Benami transaction is also recognized in Pak-IndiaSub-Continent. In one sense the word "Benami" signifies a transaction which is real, asor example, when A sells property to B but the sale-deed mentions X as the purchaser. Here the sale is itself genuine but the purchaser is B and X is his "Benamidar". In this situation the property belongs to B and not to the X though the title is vested. in the name of X. So, t is the B who is to be charged to wealth tax and not the X. Though the presumption of saw is that the person in whose favour the sale as disclosed by the deed was effected, is he proper owner but this presumption is rebutted by proof that the sale was with the funds of deal owner or for the benefit of the real owner. In all these cases he bonus ofproofis on theperson stating that the transaction is Benami one.

To understand to what perspective the words 'belonging to" are used in section 2(m) of the Wealth Tax Act, the expression "owner" is also being discussed. It is to be impressed in the mind that unlike the words used in section 2(m) of the Wealth Tax Act, thelegislature has used altogether different phrase in section 19 of the Income Tax Ordinance, 1979, i.e. "any property of which assessee is the owner". There is absolutely no intricacy in defining the word "owner" because whenever this expression is used, it always refers to one who has dominion over a thing, which he has the right to enjoy arid to do with it unless he be prevented by some law, agreement or covenant which restrains his right. So no sooner the vendor has received full consideration and parted with possession of the property and the vendee has the right to call upon him for execution of the conveyance, itmeans that the vendor has handed over his dominion to the vendee and separated himselffrom the rights of ownership and user in and over the property. In the circumstances, the property does not belong to the vendor but to the vendee though the sale-deed is in the name of the vendor.

We have also gone through a case law decided by apex Court of the Pakistan in re: Abdullah Bhai v. Ahmed Din reported as 1964 PI.D SC 106 wherein, while defining the rights of the transferor and the transferee, it was observed as under:--

"When the transferee takes possession of or continues in possession of property which has been transferred to him by an unregistered deed the transferor cannot enforce a right against the transferee in respect of that property except a right provided for in the deed.Property means not the physical property but the right. in property which istransferred and the remedy of the transferor is barred only with respect to the right thatstrands transferred."

The word 'owner" has come under consideration in quite a few number of cases as well. Such as, in re: C.LT. v. Mir Nawab Barkat Ali Khan (H.C.) 1994 Tax LR 90, RB Judamall Kuthalia v. C.I.T. (S.C.) 1971-82 ITR 570, C.I.T. v. Ashland Corporation (H.C.) (1982) 133 ITR 55. Kalarani v. C.I.T.(H.C.) (1981) (30) ITR 321 (P.HC). It is manifestly held in these cases that ownership of the property does not change until registered sale-deed is executed by the vendor. But in all these cases the expression "owner" was defined with reference to charging of income from house property as used in section 9 of the Income Tax Act 1922 or section 22 of the Income Tax Act 1961. Thus, these cases do not lend support to the learned A.R. is contention, mentioned above, because liability to the wealth tax arises owing to belonging of the asset. Even the Tribunal's decision (1997 PTD p.337) referred to by the learned A.R. is of no avail to the assessee as the decision in that case rests on diversified facts viz-a-viz the assessee's case. Here we would like to add that the basic principle of defining the word is that its meaning is to be gathered from the connection in which it is used and from the subject-matter it is applied.

From foregoing discussion we are persuaded to come to inescapable conclusion that where possession of the property has been handed over to the purchasers and the purchasers are in rightful possession of the same as against the vendor and in occupation of the property in question and, secondly the entire consideration has been paid and, thirdly, the purchasers were entitled to resist eviction from the property by the vendor in whose favour the legal title vested because conveyance has not yet been executed by him and when the purchaser in possession had aright to call upon the assessee to execute the conveyance, it cannot (sic) be said that the property legally belonged to the vendor within the meaning of expression "belonging to" as used in section 2(m) of the Wealth Tax Act.

It is, therefore, held that the legislature has purposely used the expression "belonging to" in section 2(m) of the Wealth Tax Act because it is not the intention of the legislature to burden an assessee with incidence of wealth tax to whom the asset does not belong. This expression, in reality encompasses both the eventualities for the purpose of charging wealth tax on the asset. One, where the assessee has not disposed of or alienated his property and is in exclusive and absolute possession thereof. He, being the owner of property, is liable to wealth tax. In other situation, where the assessee has paid the consideration in full and has been in exclusive and absolute possession of the property and has been empowered to dispose of or even alienate the property and has also the right to get the conveyance duly registered and executed in his favour within a reasonable time. Such asset belongs to him and he should be charged to wealth tax.

Referring to the facts of the present case, the plot was allotted and transferred to the assessee in 1990 whereas the agreement between the assessee and the C.D.A. was executed on 27-2-1994. So, in no way this agreement supports the learned A.R contention that till construction of the house, the plot allotted to the assessee belongs to the C.D.A. It is not understandable what was the occasion for executing this agreement after the lapse of almost four years from the date of allotment of the plot which was July, 1990. Had it been so, the C. D. A. would have mentioned regarding factum of execution of a separate sale agreement either in the brochure or in the allotment letter or in the letter of delivery of possession of the plot to the assessee. There is no dispute to the fact that this scheme, commonly known as Self-Financing Housing Scheme, was launched on the initiative of he Federal Government to provide shelter to its employees On Ownership Basis in Islamabad in 1988 and subsequently in 1992 and in 1997 as well.

It is worthwhile to mention that the Capital Development Authority (C.D.A.) is creation of an Ordinance. The main purpose of this authority is acquisition, management and development of the Federal Government's Territory. For this purpose it has formulated its own bye-laws and procedures. It also keeps complete record of allotment and transfer of land or plots to the owners. On transfer of the estate, it charges transfer fee in accordance with the rates fixed by the Authority as well.

So far as the Transfer of Property Act is concerned, it does not apply to the Federal Territory. However, the Registration Act, 1908 applies to whole of Pakistan including the Federal Government's Territory. The Registration Act unlike the Transfer of Property Act strikes only at documents and not at transactions. In the same way the Act does not require that a transaction affecting immovable property should be carried out by registered instrument. All that it enacts is that when a document is employed to effectuate any of the transactions specified in section 17 of the Registration Act, such document must be registered. As the C.D.A. maintains complete record of allotment and transfer of land or plots etc., and also charges transfer fee from the parties concerned, therefore, the documents, such as sale-deeds etc. are neither required to be executed tier any exigency arises for registration of such document with the Registrar, Islamabad to effectuate the transaction.

Since, ownership of the plot hitherto exists in the name of the assessee in the C.D.A.. record coupled with it possession of the same has factually taken place and he is enjoying undisturbed possession, management and benefits of the asset for the last eight years, therefore, it is held that the: plot in question belongs the assessee on the valuation date and was right included in the net wealth of the assessee within the meaning of section 2(m) of the Wealth Tax At, 1963. Thus, the contention of the learned A.R that tin execution of a registered sale-deed; corpse of the plot vests with the C.D.A. is misconceived in view of foregoing discussion.

The next objection of the learned A.R. is that a loaded property cannot be valued at the market rate. If by ignorance of law, the assessee had shown the value of the plot under the head "Immovable assets" in the wealth tax return, it does not mean that the plot in question should be valued as Immovable assets. The only course available with theAssessing Officer was to accept the amount of plot declared by the assessee under the head "moveable assets", being the premium paid for the plot. To support the contention, reference was made to a case of Indian jurisdiction reported as (1983) 141- ITR page 942 in re: C.I.T. Wealth Tax Delhi-I v. Smt. Promilla. Bali wherein it was observed that the value of a plot allotted to a member of a Cooperative House Building Society is to be determined according to the contribution made by the members to the society towards the plot as there is total ban on transfer to a non-member of the society.

There is absolutely no substance in this contention of the learned A.R. for the reason that the C.D.A, has allotted a plot to the assessee-on ownership basis and full consideration thereof has been paid by him. Possession of the same has also been handed over and all the rights over the property are being enjoyed by the assessee. Certainly this asset falls within the meaning of "immovable" and not the 'moveable" property because this expression, according to section 3(25) of the General Clauses Act, 1897, includes land, benefits to arise out of land and things attached to the earth or permanently fastened to anything attached to the earth.

As regards the case law referred to above somehow this case does not come to the rescue of the assessee this case been decided by august High Court of the India on altogether different set of fact. For example it was a case of a Cooperative House Building Society, registered under the Cooperative Societies Act, which allotted the plots to its members and there was total ban on transfer to non-members of the society. On the other hind the C.D.A., in the present, case, is a creation of the Presidential Order, having the administrative control of ft Federal Government allotted the plots to the Government Employees, through the Federal Government Employees Housing Foundation, on ownership basis and the strangers can buy these plots from the al1ottees and -can get them transferred in their names after obtaining prior permission from the Housing Foundation and the C.D.A. dose not have any objection to such transactions. A few instances in this regard were also quoted by the learned D.R. at the bar which are as under:--

Since, the assessee was the owner of the plot and it being free from any encumbrances, no wrong was done by the Assessing Officer in treating and charging this asset to wealth ax in the heading "immovable asset".

The learned A.R. also vociferously contested that though the-learned D.R. has referred to a few cases wherein the other allottees sold their plots in the open market, such evidence does not have evidentiary value because sale of such plots had been-made in violation of the agreement between them and the C.D.A.. Thus, the assessee's case could not be roped in so as to place enhanced valuation of the plot. He also pointed out- that the Assessing Officer, while adopting higher value of the plot, admitted in evidence an under stamped sale agreement. which. was inadmissible according to the provisions of section 35 of tire Stamp Act, 1789. Although the registration of an instrument, not duly stamped, is an error of. procedure, nevertheless, it renders the instrument inadmissible in evidence and unable to be acted upon by persons who have authority to receive it in evidence or by a public officer. In fact the Assessing Officer has inflected substantial loss of revenue on the State under the Stamp Act, 1899 as also under section 17 of 'the Registration Act (XVI of 1908).

The learned A.R s contention that the evidence produced by the learned D.R. to point out that such plots are being freely sold in the open market does not have any evidentiary value, is devoid of any force. It is well-settled law that an unregistered document, which requires registration under section 17 of the Registration Act, 1908, can be admitted in evidence for a collateral purpose viz; to prove the nature anal character of possession, though the character and nature of the possession cannot be separated from the main transaction evidenced by the document. There is no dearth of case law on this point.

Lastly, the learned A.R., objected to the valuation of the plot being made in contravention to the provisions of rule 8(3) of the Wealth Tax Rules. This objection is without any weight because rule (3) of the Wealth Tax Rules. 1963 provides that the value of land and building, is to be determined with due regard to the nature and size of the property, the amenities available and price prevailing for similar property in the same locality or in the, neighborhood of the said locality: First proviso to the said rule is a cap to limit valuation of the property to 10 times on the basis of its gross annual letting value. This proviso further provides that the value determined by the Collector of the District is applicable only in a case wherein property being assessed is the open plot of land. 1n the present case the property in question is an open plot of tend. But no value is notified by the Collector Islamabad for the purpose of calculation or charging of stamp duty under the Stamp Act, 1988 during the years under appeal. So, in this eventuality the value of the plots, falling in the Federal Territory, is to be determined in accordance with the main provisions of rule 8(3) of the Wealth Tax Rules. Since, the value of

the plot was determined by the Assessing Officer as per rule 8(3) read with first proviso to this rule, therefore, no illegality was committed by him while determining the value of the plot. Consequently, the order of the Appeal Commissioner stands vacated and. that of the Assessing Officer is restored on the point of valuation of the plot in question. As a result, all the three appeals filed by the Department succeed.

(Sd.)

(Rasheed Ahmed Sheikh),

Judicial Member.

MANSOOR AHMED (ACCOUNTANT MEMBER).---I have had the benefit of reading the order proposed my learned brother, the Judicial Member in this appeal. However, with utmost regard for the views of my leaned brother I find myself unable to agree to the enunciation of law and findings on facts reached by him. I would now state my reasons for holding a different opinion.

The issue under consideration is whether or not the plot question belongs to the assessee so is to be included to his net wealth tax purposes. There can hardly be any dispute that "belonging of asset does include the concept of "ownership". The question of ownership of', immovable property for the purposes of charge of income-tax on rental income from such property has come under consideration in a number of cases both in Pakistani and Indian jurisdictions. Some of these cases are discussed as follows.

In Bachu Bai F.E. Dinshaw v. C.I.T. reported as 1967 PTD 170, the Executors of the Estate of Late F.E. Dinshaw sold that property, received full sale consideration and gave possession of property to the purchaser but no regular .sale-deed was executed. The Executors were held to be the owners of property within the meaning of section 9 of Income Tax Act. The importance of a registered sale-deed in determining the ownership of property was highlighted in the following words:--

--------the question of ownership of property in dispute shall have to be determined onhe law administered in Pakistan and no any broader or general notions of ownership. It is well-established general principle that where the law prescribes a mode of transfer compliance with that mode is necessary in order to confer title against third parties. It seems to us that when the law requires a registered instrument title or ownership cannot be conferred by mere -agreement of parties. This is quite clear from the provisions of section4 of the Transfer of Property Act and section 19 of the Registration Act."

In B. D. Avari v. CIT cited as 1989 PTD 670 (H. C. Kar.) the assessee had sold his property to his minor sons through agreement and sale consideration was received by himto registered sale-deed was, however, executed. It. was held that under section 54 of the transfer of Property Act, a contract of sale does not create any right in the property. The right in property is created on registration of sale-deed. Therefore, the assessee was owner of property and liable to pay tax on rental income from the said property

There are many similar decisions in Indian jurisdiction. In C.I.T. v. Hans Raj Gupta (1982) 137 ITR 195, the assessee sold his properties to two companies who had paid full sale consideration but registered sale-deeds were not executed. The assessee was held to be liable to be assessed to tax on income from these properties as he remained owner of properties irrespective of the fact that he was not earning any income there from. In another case, cited as C.I.T. v. Zorostrian Building Society Limited, (1976) 102 ITR 499, the assessee had entered into an agreement to sill his property. The buyer had paid full price and taken possession of property. It was held that even though the purchaser was put into possession with all other rights incidental thereto, in the absence of a registered sale-creed, the transferee could not be regarded as owner. Similar decisions were handed down by Bombay High Court in C.I.T. v. Sultan Brothers (Pvt.) Limited, (1983) 142 ITR 249, and by Calcutta High Court in C.I.T. v. Ganga Properties Limited (1970) 77 ITR 637.

While considering the meaning of words "belonging to" in section 2(m) of the Wealth Tax Act, my learned brother has observed that whenever the word "owner" is used, it always refers two one who has dominion over a thing, which he has the right to enjoy and to do with it unless he is prevented by some law, agreement fir covenant which restrains his rights. Accordingly, he has reached the conclusion that when the vendor has received full consideration and parted with possession and the vendee has a right to call upon him for execution of the conveyance the property does not belong to the vendor but to the vendee. It appears that my learned brother has equated the beneficial ownership with legal ownership. I am afraid I cannot subscribe to this view because there cannot be two owners of the same property, one the beneficial owner and the other, the legal owner.

My learned brother has referred to certain case law, in the context of the meaning he word "owner" but has concluded that in these cases the term "owner" was defined with reference to charging of rental income from property. In other words, he seems to be of the view that the expression "belonging to" tit the Wealth Tax Act carries a different connotation than the word 'owner" used in Income tax Law. Perhaps, the pertinent case would be that of (Late) Nawab Sir Mir Osman Ali Khan v. C.W.T., cited as (1986) 162 ITR 888. in that case, the assessee, the Nizam of Hyderabad, had sold certainimmovable properties, had received full consideration and had handed over possession of the properties to the purchasers but registered sale-deeds in favour of vendees had not been executed. The question that arose was whether these properties "belonged" to assessee oil the valuation date for wealth tax purposes. The Supreme Court of India held that for all legal purposes these properties had to be treated as belonging to the assessee within the meaning of section 2(m) of the Wealth Tax Act. In the said judgment, the case of Raja Muhammad Amir Khan v. Municipal Board of Sitapur on which my learned brother has relied in the context of the meaning of the word 'belonging" has also been referred to, but for purposes of wealth tax the Indian Supreme Court has confined the meaning of this expression to legal ownership. Mere possession or joint possession unaccompanied by the right to be in possession or ownership of property was not considered enough to bring such property within the definition of "Net Wealth". It may be profitable to quote the following observation from the said judgment:---

"Even though the assessee had a mere husk of title and as against the vendee no reality of title, as against the whole world he was still the legal owner and the real owner."

The meaning of the word "belonging" also came tinder consideration before this Tribunal in a case cited as 1996 PTD (Trib.) 905. Relying on some English case law as well as case of (Late) Nawab Mir Osman Ali Khan, it was held that the property "belongs" to a person who owns it.

The fact that the Transfer of Property Act has not been extended to the capital territory of Islamabad will not make any material difference because the Registration Act, 1908, is applicable, which required that the sale of immovable property must be through a registered document. Section 49 of the said Act stipulates that unless such document is registered, the right, title or interest of the seller in the property is not extinguished nor that of purchase created. Besides, basic principles of the Transfer of Property Act are generally 'applied even in areas to which the said Act does not extend. Where a law, requires a certain act to be done in the prescribed manner, then the requirement of law as to be fulfilled to lend legality to such act. The law cannot be set aside by mere agreement between parties.

Even in a benami transaction, execution of sale-deed is the requirement of law.. It is quite another matter to determine whether the benamidar or some other person is the actual purchaser/transferee. This aspect is not relevant to the issue under consideration in the appeal.

For the foregoing reasons, I hold that in the facts and circumstances of the case, the plotin question did not belong to the assessee and consequently could not be included in hiset wealth for charge of wealth tax. the issue relating. to valuation requires no adjudicationas it is no more relevant.

(Sd.)

(Mansoor Ahmed),

(Accountant Member)

MUHAMMAD MUJIBULLAH SIDDIQUI (CHAIRMAN)---This case has been referred to me for resolving the difference of opinion between the learned Judicial Member and the learned Accountant Member. The learned Judicial Member and the learned Accountant Member have narrated the facts in detail and, therefore, for the sake of brevity I would not like to narrate the relevant facts again. The difference of opinion between the learned members has arisen on the interpretation of the expression 'belonging' occurring in section 2(1)(16) of the Wealth Tax Act, 1963 (before amendment introduced by Finance Act, 1997 the relevant provision was numbered as section 2(1)(m). By Finance Act, 1997 the contents of the provisions have been left intact and the provisions have been merely re numbered). Both the learned Members have dealt with the exposition of law in detail which I will consider presently.

Heard Mr. Aftab Ahmed, learned representative for the department and Mr. SikandarHayat Khan, Advocate for the respanded/as5essee. A perusal of the opinion expressed by the learned Judicial Member shows, that according to him 'the expression 'belonging' is wider term than the expression ownership. According 'to the learned Judicial Member the expression 'belonging' includes the connotation of ownership as well as the absolute right of user. The order as follows:-

"So, Whenever the expression 'belong' or 'belonging to' is used in the documents agreements, its meanings are not only confined to denote an absolute title but also possession of an interest."

The learned Judicial Member has further concluded on page 8/9 of the order as follows:

"From foregoing discussion we are persuaded to come to inescapable conclusion that where possession of the property has been handed over to the purchasers and the purchasers are in rightful possession of the same as against the vendor and in occupation of the property in question and, secondly the entire consideration has been paid and, thirdly, the purchasers were entitled to resist eviction from the property by the vendor in whose favour the legal title vested because conveyance has not yet been executed by him and when the purchaser in possession had a right to call upon the assessee to execute the conveyance, it cannot (sic) be said that the property legally belonged to the vendor within the meaning of expression 'belonging' to as used in section 2(m) of the Wealth Tax Act, 1963."

On the other hand the learned Accountant Member is of the view that the expression 'belonging' denotes to legal ownership only and the legal ownership is acquired by execution of an instrument in accordance with the law for the time being in force whereby title is, transferred. The' learned Accountant Member has differed with the views of learned Judicial Member and has observed as follows:---

"While considering the meaning of words 'belonging to' in section 2(m) of the Wealth Tax Act, my learned brother has observed that whenever the word 'owner' is used, it always refers to one who has dominion over a thing, which he has the right to enjoy and to do with it unless he is prevented by some law, agreement or covenant which restrains his rights. Accordingly he has reached. the conclusion that when the vendor has received full consideration and parted with possession and the vendee has a right to call upon him for execution of the conveyance the property does not belong to the vendor but to the vendee, It appears that my learned brother has equated the beneficial ownership with- legal ownership. I am afraid I cannot subscribe to this view because there cannot be two owners of the same property, one the beneficial owner and the other, the legal owner."

The learned Accountant Member has further referred to the judgment of Indian Supremeout in the case of Nawab Sir Mir Osman Ali. Khan v. -C.W.T. (1986) 162 ITR-888) inwhich the similar provisions contained in the Indian Wealth " Tax Act came forconsideration arid it was held that the. word 'belonging' means the legal ownership.

After a careful consideration of the contentions raised on behalf of parties and the case law referred to -by the learned Judicial Member and learned Accountant Member, I am persuaded to agree with the view and opinion expressed by the learned Accountant Member.

With all due deference to the pains and labour taken by learned Judicial Member, I am of the opinion that important facts escaped his notice. First, it is not always safe to place total reliance on Dictionary meanings of the words used in particular statute, while giving judicial interpretation, totally ignoring the context in which tile words are used. Although at times assistance can be taken from the Dictionary meaning but if the words have been judicially defined by the Superior Courts, the meaning so assigned required preferential treatment over the simple Dictionary - meaning. Secondly, it was ignored that the words take their shade and color from the context in which they are used, and the law of precedent is to be used with care and caution. The learned Judicial Member in addition to making reference to the Dictionary meanings contained in the Black's Law Dictionary and Webster's Dictionary has also referred to Aiyar's Law Lexicon of British India; 1946 Edition. The learned Judicial Member has also taken guidance from the judgment of Indian Supreme Court in the case of Raja Muhammad Amir Ahmed Khan v. Municipal Board of Sitapur (1965 AIR SC 1923). Judgment of Andhra Pardash High Court in the case of Controller or Estate Duty v. Lstatc of Date Sanka Simhachalam (1975) 99 ITR 370) and Calcutta High Court in the case of Controller of Estate Duty v. Jyotirmoy Raja (1978) 112 ITR 969). The learned Judicial Member has also referred. to the judgment of the Dacca High Court in the case of Salikupa Cooperative Multipurpose Society v. Sehangr (PLD 1957 Dacca 374). In all these judgments the word 'belonging' has been considered but the learned Judicial member failed to notice that the word "belonging' was used in all the statutes under consideration in authority different context and, therefore, it was not proper. to place reliance on the said judgment for the purpose of ascertaining the meaning of word 'belonging' used in the Wealth Tax Act, 1963. The learned Accountant Member has rightly observed that the Supreme Court of India while deciding the case of Nawab Sir Mir Osman Ali khan with reference to the expression 'belonging' used in Wealth Tax Act considered-its own judgment in the case of Raja Muhammad Amir Ahmed Khan Municipal Hoard of Sitapur rind still held that for the purpose of Wealth Tax the expression 'belonging' means legal ownership. So far the judgments of Andhra Pardesh High Court and Calcutta High Court referred to by the learned Judicial Member are concerned, I find that the word 'belonging' came for consideration before the two High Courts with reference to section 33(l)(N) of the Estate Duty Act, 1953 and, therefore, it was held that the word 'belonging' used in section 33(1)(N) of the Estate Duty Act, 1953 was capable of denoting an absolute title yet it is not confined to that sense because even possession of an interest less than that of full ownership could be signified by the word. This opinion was expressed because of the provisions contained to the Estate Duty Act, 1953. Thus, I am of the considered opinion that the word 'belonging' was interpreted by the Supreme Court of India in the case of Raja Muhammad Amir Ahmed Khan and the High Courts of Andhra Pardesh and Calcutta in the context of the relevant laws which came for consideration and shall have no bearing when the word 'belonging' is considered with reference to the provisions contained in the Wealth Tax Act. In this regard the relevant interpretation is as given by the Supreme Court of India in the case of Nawab Sir Mir Osman Ali Khan. So far the reference to the judgment of Dacca High Court is concerned here again the word 'belonging' was used with reference to the provisions contained in Order XXXIII, Rule II, C.P.C. which deals wit the Suits Ay Paupers. The relevant law pertained to the filing of suit by pauper who is trot possessed of sufficient means to enable him to pay the fee prescribed by law for the plaint in such suit. Thus the Dacca High Court's judgment was in entirely different context and, therefore, I am of the considered opinion that the learned Judicial Member fell in error in placing reliance on the judgment in which the expression 'belonging' was used in entirely different context and in doing so the principle of interpretation of statute and the law of precedent totally escaped his consideration. I have carefully considered the judgment of Indian Supreme Court in the case of Nawab Sir Mir Osman Ali.

Khan in which similar provisions came for consideration as being considered in this case and I am persuaded to respectfully follow the opinion of Hon'ble Supreme Court of India.

For the forgoing reasons and while agreeing with the opinion of learned Accountant Member, it is held that the assessee in this case was not the legal owner of the plot in question as the title therein was not transferred to him and, therefore, it could not be included in his net wealth. The question of including the market value of the plot in the net wealth of the assessee, therefore, does not arise. As the assessee is an individual and all the moveable and immoveable properties held by him are included in the assets for the purpose of wealth tax. therefore, the money invested for acquiring the plot is to be included in his net wealth and not the value of plot which does not belong to him. The issue referred to me is answered as above.

Consequent to above findings the appeals at the instance of department are, hereby dismissed. The Assessing Officer while framing the fresh assessment is directed not to include the market value of plot in the net wealth of the assessee but to include only themount of investment made by him for acquiring the plot under consideration in his net health.

C.M.A./M.A.K./89/Tax(Trib.)Appeals dismissed.