M.A.A Khan, J.M:— In this appeal by revenue from the order of the AAC, ARI Ahmedabad dt. 10th Dec, 1987, the short but interesting question that arises for our consideration is whether the assessee, an Individual, is entitled to exemption under s. 5(1)(iv), 5(1)(xxiii) and under s. 5(1)(xxvi) of the WT Act, 1957 (the Act) in respect of her remainderman's interest in the immovable properties, shares and bank deposits respectively settled on trust by late Sir R.J Vakil.

2. Late Sir R.J Vakil settled on trust his movable and immovable properties for the benefit of his son, Shri Toos R. Vakil, and his son's two daughters, viz., Mehr Toos Vakil the present assessee, and Tehnas R. Vakil. The father, Shri Toos Vakil, was given life interest and the daughters were given equal remainderman's interest in the properties settled on trust. At the assessment proceedings for the year under consideration, for which the valuation date was 31st March, 1979, the assessee claimed exemption under s. 5(1)(iv), 5(1)(xxiii) and under s. 5(1)(xxvi) r/w s. 5(1A) of the Act in respect of her half share, as remainderman, in the house property, shares and bank deposits respectively. She had valued her remainderman's interest in the said properties as per actuarial report which was not accepted by the WTO and he estimated the value thereof at different figure. But the valuation of the properties does not make subject matter of appeal before us. Any way, the WTO did not give any exemption to the assessee under s. 5(1) of the Act in respect of the house property as well as the shares and bank deposits on the ground that the assessee was not owner of such assets. He, however, included the value of her remainderman's interest in the said properties in the computation of her net wealth and finalised the assessment under s. 16(3) of the WT Act. The assessee appealed to the AAC.

3. In appeal, the learned AAC took note of the fact that in the case of Shri Toos R. Vakil, the father of the assessee, the Tribunal has accepted his claim for exemption under s. 5(1)(iv) in respect of his life interest in the house property. The learned AAC further noted that for the asst. yr. 1981–82, the WTO had accepted assessee's statement of value of her remainderman's interest in the various assets and had also accepted her claim for deduction as well. He, therefore, directed the WTO to allow deduction under s. 5(1)(iv) to the assessee in respect of her remainderman's interest in the house property. Taking a clue for the support of his view from the orders of the Tribunal, granting exemption under s. 5(1)(iv) in the case of the father of the assessee in respect of his life interest in the house property, the learned AAC observed that there was no reason why assessee's remainderman's interest in the shares and bank deposits should not be considered eligible for exemption to the extent provided under s. 5(1)(xxiii) and under s. 5(1)(xxvi). He accordingly accepted the assessee's claim in that behalf and directed the WTO accordingly.

4. Mr. P.K Sharma, the learned Departmental Representative, has vehemently urged before us that the approach of the learned AAC on the points involved in the present case was not at all justifiable in the facts and circumstances of this case. Mr. Sharma emphasised that the nature of the asset belonging to the assessee in the form of her remainderman's interest in the house property cannot be equated to one house or part of a house belonging to assessee as mentioned in s. 5(1)(iv) of the Act. Mr. Sharma stressed that exemption under s. 5(1)(iv) in respect to the house property wherein assessee's father was having life interest, cannot be allowed to the assessee who was simply having remainderman's interest therein which was very much in the nature of immovable property.

5. On the other hand, Mr. C.C Shah, the learned representative for the assessee, supported the order under appeal on the point and further submitted that not only the Tribunal has taken a view favouring the assessee in the case of her father, as stated above, but also the decision of the Madras High Court in the case of CWT v. K. Ramachandra Chettiar, (1983) 35 CTR (Mad) 126 : (1983) 141 ITR 771 (Mad) clearly supports the case of the assessee. It was further submitted that the Delhi Bench ‘E’ of the Tribunal in the case of WTO v. Smt. Kaushalya Rani, (1989) 34 TTJ (Del) 480 : (1989) 28 ITD 435 (Del) has taken a similar view as has been taken by the Bench of the Tribunal in the case of assessee's father in respect ot the claim under s. 5(1)(iv) in relation to the house property wherein he has been having life interest.

6. After having heard the parties on the point, we are of the opinion that the issue has been rightly decided by the learned AAC in favour of the assessee.

7. It is not in dispute that the interest of the assessee in the house property in question, as remainderman meets the requirement of the definition of “property” which may be regarded as a bundle of proprietary interests or rights of a person. The expression “assets” as defined in the WT Act, includes property of every description, both movable and immovable. Since ‘property’ may be regarded as a bundle of proprietary interests or rights, anyone of such interests or rights would itself be “property”, includible in the connotation of “assets”. Since the interest of a remainderman falls within the definition of the term “asset” it was includible in the computation of the “net wealth” of the assessee and has rightly been so included by the WTO.

8. In the case of (Late) Nawab Sir Mir Osman Ali Khan v. CWT, (1986) 56 CTR (SC) 144 : (1986) 162 ITR 888 (SC) to which our attention was invited by the learned Departmental Representative, the Supreme Court, explaining the true purport of the expression “belonging to” observed that “the liability to wealth-tax arises because of the belonging of the asset to the assessee and not otherwise. Mere possession, or joint possession, unaccompanied by the right to be in possession or ownership of property, would, therefore, not bring the property within the definition of “net wealth” for it would, not then be an asset “belonging to the assessee”. Viewed in the light of the above pronouncement made by the Supreme Court the position of the remainderman's interest of the assessee in the house property in question comes to this that she has a right to be in possession or ownership of the house after the expiry of the life interest of her father. Assessee's said interest or right to be in possession or ownership of the property is certainly a right in preasenti as on the relevant valuation date, and not mere spec successionis. It is that right of the assessee, as a remainderman, value of which has been included in the computation of her net wealth as on the valuation date. This right has a direct relation to an immovable property falling with in the purview of s. 5(1)(iv) of the Act. In that sense of the matter, it cannot, therefore, be said that as on the relevant valuation date “one house or part of a house belonging to the assessee” was not there at the relevant valuation date, so as not to attract the exemption cl. (iv) of s. 5(1) of the Act.

9. In the case of WTO v. Smt. Kaushalya Rani (supra), Delhi Bench-E of the Tribunal had the occasion to consider the claim of an assessee for exemption under s. 5(1)(iv) in respect of the house property wherein the assessee had life interest. The Tribunal negatived department's contention that life interest of an assessee in the house property did not make an immovable property and held that any interest in immovable property is itself an immovable property. Further, the Tribunal relying upon Madras High Court decision in the case of CWT v. K. Ramchandra Chettiar (supra), held that the assessee was entitled to exemption under s. 5(1)(iv) of the Act in respect of his life interest in the house property.

10. In the case of CWT v. K. Ramchandra Chettiar (supra), the Madras High Court considered claim of an assessee, having life interest in a number of houses, for exemption under s. 5(1)(iv) of the WT Act, in respect of one of the houses. The WTO had rejected the claim on the ground that the assessee was having life interest in the house property. The Hon'ble High Court, confirming the view of the Tribunal, held that the assessee was entitled to the relief under s. 5(1)(iv) of the Act. The Hon'ble High Court observed in that case that life interest was a fractional interest in property, falling short of the entire interest therein and was a well known species of property under many systems of law, ancient and modern. Since the right to be in possession or ownership of property brings such property within the definition of net wealth, so as the said asset may be said to be “belonging” to the assessee, the claim of the assessee in the instant case could not have been rejected. The right of a life estate holder is simply a right to be in possession of a property during his life time and has no relation with the ownership of the property. Conversely the right or interest of the remainderman is a right to be in possession as well as to ownership of the property, after the expiry of the life interest and as we have held above such a right of a remainderman is not only a property within the definition of the term “net wealth” but is also a right in preasenti at the relevant valuation date “belonging” to the assessee. Therefore, in our opinion, a remainderman is entitled to the exemption under s. 5(1)(iv) in respect to his rignt or interest in the house property.

10. The argument of Mr. Sharma that remainderman's interest in an immovable property is no doubt an asset includible in the computation of his net wealth but such an asset does not meet the requirements of a house contemplated by s. 5(1)(iv) of the Act is not acceptable. In appreciating the claim of a remainderman for exemption under s. 5(1)(iv) it should not be lost sight of that it is the value of his right or interest in such a specie of the property which is contemplated by cl. (iv) of s. 5(1) that is sought to be subjected to the levy of wealth-tax. No doubt the actuarial value of bis such right is arrived at under s. 7(1) on the hypothesis of a supposed open market and intending seller and a buyer of such property. On such a hypothetic sale the proceeds visualised to be coming to the seller may be regarded moveable property. But such a hypothetical approach is to be made only to know the value of the interest or right of a person and not to determinie the very “nature” of his right or interest in the property. And the nature of his right or interest, as stated above, is “to be in posssesion or ownership” of the immovable property. Such a tight is directly related to the immovable property and not to any movable property. His right or interest in the immovable property would, therefore, be immovable property itself, as held by the Delhi Bench E of the Tribunal in the case cited supra. Once the true nature and character of a remainderman's rights or interest in an immovable property is regarded as an immovable property itself and such an immovable property is of the specie contemplated by cl. (iv) of s. 5(1) there seems to be no good reason for not considering that asset with all the attributes attached to it. When attributes like location, amentities, encumbrances, restrictions on enjoyment or transfer etc. are to be considered in working out the “value of the property” why should then other types of attributes like statutory exemption from tax, very much attached to the very nature of that property for the purposes of administration of tax-laws be altogether ignored from consideration while appreciating a claim for exemption from levy of tax. The argument of Mr. Sharma is overruled. For the reasons stated above, we confirm the order of the learned AAC on the point.

11. Now so far as the claim of the assessee for exemption under s. 5(1)(xxiii) and under s. 5(1)(xxvi) in respect of her remainderman's interest in the shares and bank deposits respectively is concerned, we agree with the learned AAC that once the claim of the assessee for exemption under s. 5(1)(iv) in respect of her remainderman's interest in the house property is accepted there seems to be no good reasons to deny her exemption under s. 5(1)(xxiii) and under s. 5(1)(xxvi) as well. On the analogy adopted for approving her entitlement to exemption under s. 5(1)(iv) in respect of her remainderman's interest in the house property and which has been approved by the Delhi Bench ‘E’ of the Tribunal and the Madras High Court in the case of CWT v. K. Ramachandra Chettiar, supra and which we have respectfully followed, we are of the opinion that the assessee was entitled to exemption under s. 5(1)(xxiii) and under s. 5(1)(xxvi) in respect of her remaniderman's interest in the shares and bank deposits respectively. We would, however, like to add that the exemptions to which the assessee has been found entitled in this case in respect to the house property, shares and bank deposits would be subject to the limits prescribed for them by s. 5(1) and 5(1A) of the Act.

12. In the result, we find no force in this appeal and dismiss it accordingly.