- (1.) Since the question involved in both these references is common, they are disposed of by this judgment.
(2.) At the instance of Revenue, the Income-tax Appellate Tribunal has referred the following question of law arising out of its order dated September 1, 1986, in relation to the assessment years 1973-74 to 1979-80 under Section 27(1) of the Wealth-tax Act, 1957 : " Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in deleting the share of the assessee in the cinema building, while contrary to this the assessee has been claiming the ownership of the property and has been in possession of it since 1964 and was also enjoying the income therefrom - The dispute relates to the ownership of Chetak Cinema building. The firm, Chetak Cinema, entered into an agreement on September 19, 1964, for purchase of the building with Sanghi Brothers for a consideration of Rs. 7,50,000 and paid Rs. 7,00,000 as part of this sale consideration. No deed of conveyance was executed or registered. In respect of the assessment years 1966-67 and 1967-68 ; the Department took the stand that the firm is not entitled to depreciation on the cinema building since the ownership did not vest in the firm. The assessments were made in the hands of the assessee on the protective basis and it was observed that, if the High Court decides that the property belongs to Shri N. K. Sanghi, the protective assessment will be modified accordingly. In the income-tax proceedings, it was held that the property of the cinema building is owned by Shri N. K, Sanghi. It was on that basis, that the Tribunal came to the conclusion that the cinema building cannot be considered to be owned by the firm of which the assessee is a partner, although the actual use thereof is being done by it. The assessee's interest in the cinema building was considered to be the amount paid in advance to the other parties.
(3.) In the case of Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888, it was held by the apex court that for the purpose of wealth-tax, unless the immovable property is transferred by a registered sale deed, the transferor shall be considered to be the owner of that property. In that case the apex court while interpreting the provisions of Section 2(m) came to the conclusion that the liability to wealth-tax arises because of the property belonging to the assessee on the valuation date and not merely by possession or joint possession. In view of the above decision, since in the present case the property, i.e., the cinema building, is owned by Sanghi Brothers and the deed of conveyance was not executed or registered, the assessee cannot be made liable for wealth-tax.;