Shah, J. - (1.) By two agreements dated respectively January 1, 1943 and January 1,1945, the respondent Muthukrishna Ammal obtained from the Government of India on lease certain salt pans. Each lease was to endure for twenty-five years unless otherwise determined under the covenants of the indenture. The right under the first lease was sublet by the respondent to one K. Nadar in consideration of an annual payment of Rs. 15,000 and the right under the second lease was sublet to Mettur Chemicals Ltd. in consideration of an annual payment of Rupees 18,000.
(2.) The respondent made a return for the assessment year 1959-60 under the Wealth-tax Act of net wealth of Rs. 3,000 in India and Rs. 2,64,500 in foreign countries. The Wealth-tax Officer held that the value of the interest of the respondent in the salt pans for the unexpired periods of the two leases was liable to be included in the computation of her net wealth. Valuing the leasehold interest in the salt pans at the average rate of income received from the last three years, for the unexpired terms, "the Wealth Tax Officer brought to tax in addition to the net wealth returned by the respondent an aggregate amount of Rs. 1,89,330. The order was confirmed by the Appellate Assistant Commissioner. But the Income-tax Appellate Tribunal held that the interest of the respondent in the salt pans was not an "asset" within the meaning of Section 2 (e) (v), for the interest of the respondent in the land was not available to her for a period exceeding six years. The Tribunal accordingly directed that the value of the leasehold interest in the salt pans be deleted in the computation of the net wealth of the respondent.
(3.) The Tribunal referred the following question to the High Court of Madras for determination. "Whether the leasehold interest of the assessed in the salt pans is an "asset" within the meaning of Section 2 (e) (v) of the Wealth Tax Act, 1957, and its value is includible in the net wealth of the assessee - The High Court of Madras held that the leasehold interest of the respondent in the salt pans was not an "asset" within the meaning of Section 2 (e) (v) of the Act and its value was accordingly not liable to be included in the net wealth of the respondent. The Commissioner of Wealth-tax has appealed to this Court with certificate granted by the High Court.;