Per Shri S. K. Chander, Accountant Member - This appeal by the assessee is directed against the order of the AAC dated 6-11-1981 relating to the assessment year 1979-80. Before we project the issue that has travelled before us, we would like to have a look at the factual backdrop of the case. This is as under : 2. The assessee, Shri Shyam Sunder Lal Khemka, is a member of Shakti House Building Co-operative Society. This society allotted him a plot of land admeasuring 510 sq. yards. and the assessee paid initial instalment of Rs. 8,000 to the society. When he filed a return for the assessment year 1979-80 on 9-10-1979 declaring net wealth of Rs. 2,52,215, he showed the value of this plot at Rs. 8,000 in the return.
He filed a return on 13-11-1979 declaring net wealth of Rs. 3,51,600 revising the value of the jewellery but keeping the value of the plot at the same figure as declared earlier.
3. During the course of assessment proceedings, a claim was made before the WTO that the value of the plot shown by the assessee was exempt under section 5(1) (xxx) of the Wealth-tax Act, 1957 (the Act). The WTO, however, did not accept this claim. On the other hand, the estimated the value of the above plot, by deputing his Inspector to make enquiries on the spot, at Rs. 35,700. This was included in the net wealth of the assessee in terms of sub-section (7) of section 4 of the Act inserted by the Finance (No. 2) Act, 1971, with effect from 1-4-1972. The assessee felt aggrieved by this action of the WTO and went up in appeal before the AAC.4. The AAC held that the right, title and interest of the assessee in the plot of land allotted to him by the Co-operative Society, for which he had already paid Rs. 8,000, was a valuable and transferable right.
He held the action of WTO as fully justified. Hence, the appeal before us.
5. It is common ground, however, that the plot of land had only been allotted to the assessee by the society and the assessee has not yet paid the full consideration thereof. The assessee had also not become the owner of the plot in the sense that the plot had not been transferred to the name of the assessee by a registered deed by the society. The learned counsel for the assessee, therefore, argued before us that the assessee could not be taxed in the manner done by the authorities below because he had no transferable right as such. He had only paid Rs 8,000 and unless necessary formalities of the transfer of the plot by a registered deed were completed and the assessee paid the amount due, he could not have been having that type of right, title and interest in the property that has been held by the authorities below and the value of which has been included in the net wealth of the assessee. For the proposition that the right, title and interest of the assessee in the co-operative society anent (sic) the plot of land in dispute could not be valued in the manner done by the authorities below and could not be included in his net wealth. The learned counsel for the assessee relied on the ratio decidendi of the following judgments : CIT v. Zorostrian Building Society Ltd.  102 ITR 499 (Bom.), Divvi Suryanarayana Murthy v. Competent Authority, IAC  117 ITR 278 (AP) and CIT v. Bhurangya Coal Co.  34 ITR 802 (SC).
6. On the other hand, the learned departmental representative submitted that a plot of land should be considered as part of a building even if there was no super structure in existence. This submission was made in view of the provisions of section 4(7) and section 5(1) (xxx).
According to him, the assessee had a vested right of being allotted a plot and that was a valuable right which could be valued and quantum thereof included in the net wealth of the assessee. This valuation has to be taken on the basis of the market rates. It was also contended that the assessee had been given the possession of the plot and a part of the price had been paid and, therefore, the value could be rightly included in the hands of the assessee.
7. We have given careful consideration to the rival submissions. After consideration of the relevant provisions of law, we are of the considered opinion that the authorities below erred in bringing to tax the amount in the hands of the assessee as worked out by them. The claim of the assessee that the sum Rs. 8,000 is exempt under section 5(1) (xxx), is apparently under the misconception that the deposit made by the assessee was covered by this exemption. However, it is very clear from a plain reading of clause (xxx) of sub-section (1) of section 5 that the exemption is only with regard to any deposits with a co-operative housing society made by a member of the society to whom a building or part there of is allotted or leased under a house building scheme of the society, where such deposits have been made under such scheme. In our considered opinion, a bare plot of land is neither a building in itself nor a part thereof. If we are to uphold the contention of the revenue in this regard, all the vacant lands lying can be said to be part of buildings. This proposition, therefore, appears to us to be absolutely untenable and unsustainable. The plot of land not being either a building or a part thereof, any deposit made by the assessee in such a plot would not be available for exemption under section 5(1) (xxx).
8. Now coming to the provisions of section 4(7), we find that where the assessee is a member of AOP being a co-operative housing society and a building or a part thereof is allotted or leased to him under a house building scheme of the society, the assessee shall, notwithstanding anything contained in this Act or any other law for the time being in force be deemed to be the owner of such building or part and the value of such building for part shall be included in computing the net wealth of the assessee. Further, in determining the value of such building or part, the value of any outstanding instalments of the amount payable under such scheme by the assessee to the society towards the cost of such building or part and the land appurtenant thereto, shall, whether the amount so payable is described as such or in other manner in such scheme, be deducted as a debt owed by him in relation to such building or part. It is very clear that this sub-section (7) of section 4 cannot apply to the case of the assessee because the language used by the Legislature is building or a part thereof. If building or a part thereof, for purposes of exemption under section 5(1) (xxx), cannot include a bare plot of land, the same plot of land cannot also be considered as a building or a part thereof for purposes of this sub-section as well. Therefore, the WTO and for that matter the AAC could not invoke the provisions of section 4(7) for purposes of bringing into the net wealth of the assessee what they considered to be the right, title and interest of the assessee in the plot of land allotted to him.
9. This, however, does not dispose of the issue in its entirety.
Section 2(m) of the Act defines net wealth. Net wealth means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date. To this there are certain exceptions provided under the definition but we are not concerned with them in determining the issue before us. The argument of the learned counsel for the assessee, therefore, that the assessee was not the owner of the plot, cannot be of much help to him. No doubt the ownership will belong to the assessee after a registered deed is executed as held by the Supreme Court in the case of Bhurangya Coal Co. (supra) and subsequent judgment on this issue of the Court but we have to see whether the value of the right, title and interest of the assessee, as made by the authorities below, can be done in that manner and included in the net wealth of the assessee. None of the authorities below have gone into the question whether according to bye-laws of the society, the assessee was having a transferable right. However, it may not be very important to go into this aspect of the matter because what the assessee has got is not plot already transferred to him which he can dispose of but only a right to buy the plot of land for which he has paid Rs. 8,000 to the society.
This type of right has not been shown to us before taking market value which may be determined. The authorities below have gone on the concept that this was valuable right and marketable as such. In fact, this has been the reiteration of the stand by the revenue before us but we do not find any justification and support for this stand from any of the authorities cited before us. The right of assessee as a member of the co-operative society was a peculiar and restricted to the members as such in the ordinary course. If the authorities below had to show that such a right was transferable, they had to bring on record something in support of the action that they had taken. In the absence of such an evidence, the general principles that such a right is not transferable till certain conditions are satisfied and the plot is transferred to the assessee by a registered deed will apply. Therefore, the value of such a right could not be determined by them and included in the net wealth of the assessee.
10. On the facts of the case, the assessee rightly declared only Rs. 8,000 as the value of the deposit made therein that was includible in the net wealth of the assessee. That is the only amount that can be brought to tax. Therefore, we delete the balance of Rs. 27,700 added by the WTO.