Judgment

SHAH, J.: 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.

4. The provisions of the Wealth-tax Act, 1957, in force at the relevant time may first be noticed. Section 3 provides:

"Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule."

"Net wealth" is defined in Section 2 (m) as meaning "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 this net wealth as on that date under this Act, is in excess of the aggregate value of all the debts, owed by the assessee on the valuation date, other than * * * * The expression assese occurring in the definition of "net wealth" is defined in Clause (e) of Section 2. It "includes property of every description, movable or immovable, but does not include - * * *(v) any interest in property where the interest is available to an assessee for a period not exceeding six years."

5. The covenants of the two leases are in terms identical. The following clauses in the leases are relevant, in considering whether the interest of the respondent is an "asset" within the meaning of the Wealth Tax Act:

"1. The lease shall be for a period of twenty-five years commencing from the 1st of January one thousand nine hundred and forty-three provided that the lessor or lessee shall be at liberty