K.P.T. Thangal, Judicial Member - (1.) THESE appeals by the assessee for the assessment years 1988-89 and 1989-90 are directed against the order of the CWT (Appeals) firstly, deciding the issue ex parte and secondly, on merits against inclusion of Rs. 5,75,500 being the value of assessee's membership card of Stock Exchange for assessment year 1988-89 and Rs. 6,75,500 for assessment year 1989-90.
(2.) Assessee filed return for assessment year 1989-90 on 30-12-1988 disclosing net wealth of Rs. 11,18,117. The Assessing Officer noted that the assessee was holding a Stock Exchange membership card and the same had been claimed as an exempt asset. The claim of the assessee was rejected holding that the Stock Exchange card is a property under the Wealth-tax Act and added the value of the asset. In appeal before the CWT (Appeals), the assessee contended that the membership of the Stock Exchange is a personal privilege and the right of the member is inalienable. Relying upon the decision of the Bombay High Court in the case of Mrs. Sejpal R. Dalai v. Stock Exchange [Writ Petition No. 2084 of 1989], it was contended that the membership of the Stock Exchange is a personal permission and this permission is not a property or an asset which can be transferred. The case of the assesse was distinguished by the CWT (Appeals) from the case relied upon by the assessee, and the issue was decided against the assessee, opining that the membership of Stock Exchange card is a property or an asset as per Section 2(e) of the Wealth-tax Act as the word 'property' is a term of widest import as used in the Wealth-tax Act. She further opined that the membership of the Exchange cannot be equated on par with the membership of professional bodies like Institute of Chartered Accountants of India and Medical Association of India because unlike Chartered Accountants and practitioners, no qualification was necessary to be a nominee or heir of the Stock Exchange card. She further held so, in view of the fact that the membership card issued by the Association bestows upon the holder of the card certain rights and privileges, subject to certain conditions, and it can be transferred to another by way of nomination, or in the case of death it can be passed to the legal heirs. She further opined that in view of the fact that in case of forfeiture of membership in certain cases under Rule 4 the membership card can be forfeited and the sale proceeds received on the auction of the card can be set off against the liabilities of the member and to this extent the card can definitely be said to have the value as it pays off the liabilities of the card holder.
(3.) THE learned CWT (Appeals) distinguishes the case of the assessee from that of the case that was considered by the Hon'ble High Court in Writ Petition No. 2084 of 1989 on the ground that the Stock Exchange Board refused to transfer the membership card to the daughter-in-law of the defaulter member which is a distinguishing feature with that of the instant case of the assessee.;