appeals are by department. cross-objections are by assessee. basis of all these appeals is levy of penalty under section 18(1)(c) of Wealth-tax Act 1957 ('the Act'), by WTO for assessment years 1966-67 to 1971-72. Different amounts of penalties have been levied by WTO. In departmental appeals several grounds are raised. One of grounds is that appeals against levy of penalties having been filed before AAC but subsequently transferred to and taken up for consideration by Commissioner (Appeals), order of Commissioner (Appeals) is ab initio void. Objection is also raised to Commissioner (Appeals)'s issuing show- cause notice of hearing to ITO even before receiving report from him on point of limitation. consequential ground is that ITO was not given opportunity of hearing. Apparently, reference to ITO in these grounds is mistake for WTO since appeals before us are under Act. We, therefore, proceed substituting 'Wealth-tax Officer' for 'Income-tax Officer'. 2. initial grounds raised by department to our mind are without any substance. We have heard parties on point. It would appear that instructions accompanying demand notice may be on account of routine, dealing with same referred to AAC. assessee who follows instructions of department cannot be committing error by doing so. It would be improper for department to take advantage of this misdirection and object to transfer of appeals to correct officer having jurisdiction, namely, Commissioner (Appeals) for being heard by him, This ground of appeal raised by department arises from misconception of whole matter. records of case, etc., we find were called for by Commissioner (Appeals), who issued notice of hearing also. allegation of non-grant of opportunity is also, therefore, without substance. In fact, for some of appeals relating to same group and covering same matter, WTO was present on behalf of department. These grounds raised by department are decided against it. 3. respondents in these appeals were monthly tenants in of building called 'Shikhar Kunj' situated at Carmichael Road, Bombay. On 13-3- 1950, Sahu Brothers (Saurashtra) (P.) Ltd. (S.B. Ltd.) controlled by Jain family of which respondents are members, acquired abovementioned property. On 24-2-1966, Carmichael Properties (P.) Ltd. (CPP Ltd.) was incorporated as wholly subsidiary company of SB Ltd. to acquire above- mentioned property. On 30-3-1967, CPP Ltd. purchased this property for sum of Rs. 47 lakhs. At time of purchase, twelve respondents on whom penalties under section 18(1)(c) have been levied by WTO and whose appeals are considered hereunder were tenants of this property. On 10-3- 1966, SB Ltd. and CPP Ltd. entered into agreement relating to this property. This agreement referred to tenancy of respondents. By letter, dated 7- 1-1966, deal was struck between SB Ltd. and CPP Ltd. and also tenants. According to this, tenants were to be allotted flats in building to be constructed on premises after pulling down existing building. assessees, tenants of property, were to continue as tenants in new building constructed. They had also option to purchase flats allotted to them as tenant. purchase price also was subject to option. They could either pay cost of construction or particular multiplier of standard rent. By their letter dated 4-4-1966, CPP Ltd. ratified above agreement between SB Ltd. and its tenants, present assessees. In November 1971, constructed flats were occupied on ownership basis by assessees. 4. In original assessment to wealth-tax, assessees had not referred to any of above details or transactions. Scrutinising abovementioned documents, WTO found that average price of flat sold t o outsiders is at Rs. 98 per square ft. in new building. To present assessees, these flats were to be sold at price of Rs. 53 per sq. ft. i.e., Rs. 45 per sq. ft. lesser than to outsiders. Likewise, garages constructed in new building were sold to these assessees at Rs. 2,500 per garage whereas outsiders were charged Rs. 8,500. According to WTO in-built in these transactions was asset of sub-stantial value, which was not included in original wealth-tax return or wealth-tax assessment of these assessees. Since this asset was not taken into consideration at time of original assessment, assessees having concealed details thereof, reassessment proceedings were started. WTO completed assessment by including extra asset valued at Rs. 1,30,000 in new wealth of each of assessees for each assessment year. assessees appealed against this inclusion. But before AAC, assessees did not contest appeals. They withdrew same. This was done by letter addressed to AAC on 30-7-1980. 5. WTO noting that assessees had omitted above asset valued t Rs. 1,30,000 from returns, started penalty proceedings for concealment and levied penalties under section 18(1)(c) for all assessment years from 1966-67 to 1971-72. In case of S.P. Jain, penalties levied were Rs. 980, Rs. 922, Rs. 1,096, Rs. 839, Rs. 967 and Rs. 1,251 for these years. Similar penalties were levied in case of all these assessees for abovementioned assessment years. penalties levied, according to WTO, represented minimum penalty equal to tax sought to be evaded. 6. In appeal to Commissioner (Appeals), it was argued before him that assessees did not include value of above asset in returns of net wealth in bona fide belief that in law, it did not constitute asset for purposes of wealth-tax. Commissioner held that assessee could not be said to have acted deliberately in defiance of law or in conscious disregard of his obligations. It was also pointed out before him that assessees did not contest additions but withdrew appeals filed before AAC for reason that tax involved was small. Commissioner (Appeals) held that t h e assessees did not conceal their wealth or furnish inaccurate particulars thereof. penalties were cancelled for all years. It is, thus, that matter is before Tribunal in case of all assessees and for all these assessment years. 7. Taking us through details of agreement between SB Ltd. and CPP Ltd. and assessees, learned counsel for department has pointed o u t that letters dated 7-1-1966 and 4-4-1966 represent deal struck between parties. Under agreement, each of assessees was to have flat in newly constructed building. While outside purchase price of flat would be on basis of Rs. 98 per sq. ft. assessees were given flats at Rs. 53 per sq. ft. There was concession also in price of garages. difference arose, according to learned counsel, because under agreement, assessees were already possessed of asset valued by WTO at Rs. 1,30,000 given as past consideration for flats purchased. difference between price paid by outsiders and assessees, according to learned counsel, represented value of right which assessees had in old building 'Shikhar Kunj' and on its conversion into newly built multistoreyed building. matter has to be considered by taking into account all details. One has to go through pith and substance of transaction. assessees knew that when they surrendered their tenancy, they would get as consideration for same, flat in new building. value of this asset as computed by WTO was always in possession of assessees. They were conscious of same. It was not by mere agreement that this asset was brought into existence. asset was already there. It is also pointed out by conceding before first appellate authority above position that assessees accepted existence of asset. They have been also assessed on same. assessments have become conclusive. Taking us through assessment order, learned counsel pointed out that special concession having monetary value was given to them under agreement with SB Ltd. and CPP Ltd. right to occupy new flat allotted in lieu of old tenement was transferable and marketable right having monetary value. Even otherwise, test of transferability is not important for treating something as asset. 8. Stressing point that assessees were conscious of their having valuable asset with them and also that they had not returned that in their net wealth, learned counsel pointed out that this omission was clear from their letter dated 3-12-1980 addressed to AAC. In this letter, assessees have mentioned that ground relating to inclusion of tenancy right as asset was withdrawn because they were accepting tenancy right as asset. Even ground of appeal before AAC had not objected to treat tenancy right as interest in property. At time when these appeals were withdrawn, penalty proceedings had already been started. assessees, therefore, cannot say that they withdrew appeals on understanding that no penalties would be levied. Commissioner (Appeals) has exonerated assessees on question of bona fide belief that there was no includible asset. Substantial evidence has been laid in quantum appeal to substantiate existence of asset and this has been accepted by assessees in their letter addressed to AAC. evidence available in quantum appeal, according to learned counsel, was sufficient and good evidence even for purposes of penalty appeals. learned counsel referred in this connection decisions in R.S. Joshi, STO v. Ajit Mills [1977] 40 STC 497 (SC), Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC), Burmah-Shell Oil Storage & Distributing Co. of India Ltd. v. ITO [1978] 112 ITR 592 (Cal.) and Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales Tax [1980] 124 ITR 15 (SC). These decisions rather than helping assessees support department's case. 9. learned counsel has pointed out that expression 'asset' in section 2(e) of Act must be given comprehensive meaning. Unless it is excluded from net wealth, every asset has to be included in net wealth. Tests have referred to nature of property, its transferability and having value for itself as constituting elements going to make asset. absence of one or other of these tests in full or in partial measure does not make asset any less so. Reference is made in this connection to decisions in case of CWT v. Purshottam N. Amersay [1969] 71 ITR 180 (Bom.) (confirmed by Supreme Court in Purshottam N. Amarsay v. CWT [1973] 88 ITR 417), Ahmed G.H. Ariff v. CWT [1970] 76 ITR 471 (SC) and CWT v. Smt. Rani Kaniz Abid [1974] 93 ITR 332 (All.). Aid has also been taken of decisions in CIT v. New India Assurance Co. Ltd. [1980] 122 ITR 633 (Bom.), CIT v. Tata Services Ltd. [1980] 122 ITR 594 (Bom.) and CIT v. Sterling Investment Corpn. Ltd. [1980] 123 ITR 441 (Bom.). Referring to provisions of section 18(1)(c), it is pointed out that section 18 deals with different faults attracting penalty. With regard to different defaults, section utilises different terminology. On facts, assessees knew that they were in possession of valuable asset. Even so, no value for this asset was returned. same material which formed basis for sustaining addition in this case by first appellate authority would constitute material to support levy of penalty as well. No fresh material was required. In present case, assessees had clearly concealed items of net wealth knowing that they were in possession of them. They were entering into agreement and transactions with parties with full knowledge not only o f their being owners of these assets but also conscious of their worth. When gift-tax proceedings were taken against CPP Ltd., on ground that reduced value at which flats were given to these assessees represented gift in their hands, assessees relied on wealth-tax assessments made to challenge them. According to learned counsel, this was clear admission on part of assessees that this asset possessed value and knowingly they did not return its value for wealth-tax assessment. Because of stand taken by assessees and almost acceptance of wealth-tax addition in disclaiming liability to gift-tax, gift-tax proceedings were correctly dropped by revenue. Thus, according to learned counsel, there was clear case of concealment. fact that all these transactions were accomplished through medium of private companies in which they were interested would make matter more sinister. entire position has to be looked at as whole. cumulative evidence on activities of assessees, according to learned counsel, points out to clear default on their part which attracted penalty for concealment. revenue has been generous in fact by restricting penalty to minimum. 10. learned counsel for assessees has pointed out that levy of penalty in these cases were neither justified nor proper. Referring to argument of learned counsel for department that small penalty was levied only to show displeasure of department against contumacious conduct of assessees, it is pointed out that not only was penalty levied for all years but, prosecution proceedings have also been started before Magistrate. Even if assessees were to ignore penalty as nominal, initiation of prosecution proceedings required assessees to get facts put right and in their proper perspective. It is learned counsel's stand that very additions made in these cases were unjustified. matter covered as many as 70 assessments. amount of penalty in each case was small. But if for sake of principle, assessees were to challenge levy, department might force these parties to go right up to Supreme Court. This would have involved assessees enormous financial loss and other inconvenience. This was more so, since they will have to defend each one of assessments separately. It was for this reason that assessees withdrew appeals before AAC. This fact was made clear by last paragraph of assessees' letter addressed to AAC, dated 3-12-1980. Even in this letter chartered accountants made it clear that general question whether particular right even as interest in property was not covered by Act as asset for inclusion in net wealth. letter also made it clear that main purpose of assessees' withdrawing appeal was only to avoid escalating litigation. 11. learned counsel has pointed out that there was in fact no justification for making addition of Rs. 1,30,000 to net wealth by assessees. Even if on account of his withdrawal of appeals, assessments became final in penalty proceedings, he could well put forward proper legal claim, viz., that additions were unjustified. Elaborating his point, reference is made to provisions of letter dated 7-1-1966 addressed by SB Ltd. to all respondents. Paragraph No. (d) of this letter specified that assessees were only monthly tenants. rights given to assessees were only to occupy place as tenants. reference to monthly tenancy indicated that assessees were permitted to stay only for month. Any protection of tenancy secured to them by tenancy legislations could always be waived if justice of situation warranted it. In other words, as conscientious citizen, if assessees found claim for vacation of premises made by landlord, it was proper. Whatever be rights under law, they might have to vacate premises. assessees' rights, therefore, were very limited in scope. letter, according to learned counsel, further made it clear that only option was given to assessees in view of their limited legal protection under tenancy Acts. Referring to specific terms of this letter, it is pointed out that premises were to be vacated but alternative accommodation till completion of new building was to be arranged by tenants only and at their own cost. This is provided by sub-clause (i) of clause (g) of paragraph (d) of letter. Sub-clause (iii) of clause (g) though referring to payment of rent of rupee one after sale of property had no legal effect. This clause only made offer to give alternative accommodation for old tenants of old building in new building at standard rent for these premises. option given in sub-clause (iv) of clause (g) for purchasing flats did not in fact relate to tenancy at all. further option as regards price, namely, standard rent calculated at rate of 7 per cent yield per annum capitalised or cost price of carpet area of flat, whichever is lesser, would also not directly relate to tenancy. According to learned counsel, therefore, these advantages by way of option can in no circumstances be related to assessees being tenants in old building. At any rate, assessees had only right to be granted alternate accommodation in new building at standard rent. option to purchase flats was nowhere in picture as far as tenancy was concerned. If assessees were not to exercise option, their rights would have been different. According to learned counsel, therefore, there was no asset which either tenancy with standard rent or option to purchase secured to assessees on these valuation dates. 12. Referring to section 17(b) and section 19 of Bombay Rent Hotel and Lodging House Rates Control Act, 1947, it is pointed out that assessee had only right to be tenant. tenancy could not be transferred. More than that receipt of any monetary consideration for transfer of tenancy was offence. WTO cannot administer law for which he was responsible in such way as to compel citizen to commit offence either under that Act or any other statute, in this case Bombay Rent Hotel and Lodging House Rates Control Act. By assuming value for transfer of tenancy which in fact cannot be transferred in law, WTO was doing just this. In-between demolition of old building and construction of new building, there was no tenancy, at best promise of future tenancy. It is also pointed out that till option is exercised even granting that it has value, it cannot be evaluated. In present case, option was exercised only in November 1971. After this date, assessees in fact returned value of flats as part of net wealth. assessees had in their letter to WTO stated that tenancy was not taxable. definition of asset in Act was to include value of asset. If there was no monetary value for asset, it could not be included in net wealth, even if it was deemed to be property for some other purposes. According to counsel, WTO assessed 'tenancy right' as asset includible in net wealth. departmental counsel's stand, therefore, that it is not tenancy right but agreement which conferred benefit to assessees that is valuable right, is altogether different stand not contemplated by WTO. 13. Summarising position, it is pointed out that in present case, assessees had no asset which could be accepted as such for wealth-tax purposes. monthly tenancy in old building referred to in letter of SB Ltd. was at best precarious asset. No decision of any Court has been cited to show that any value of tenancy should be included in net wealth. learned counsel also referred to fact that there is clear distinction between asset having no value on transfer and prohibition on making transfer of asset. Factually, therefore, there was no asset representing these agreements and transfers entered into by assessees with their erstwhile landlord which could be included in net wealth. Even though, therefore, assessees had withdrawn appeals before AAC, assessment itself stood intrinsically improper and unjustified. Apart from fact that even assessments were not correct, it is pointed out that assessees were under bona fide belief that particular included asset was not includible for wealth-tax purposes. There was no contumacious conduct. Reference is made in this connection to decision in Cement Marketing Co. of India Ltd.'s case (supra). assessees had not factually concealed any item of net wealth attracting penalty. Even Explanation to section 18(1)(c) was not attracted in their cases. penalties were correctly cancelled by Commissioner (Appeals). 14. objections in these appeals are to levy of penalties. assessments including additions which form basis of penalty have become final. For reasons detailed below, we uphold orders of Commissioner (Appeals) cancelling penalties. cross-objections in effect pray for upholding orders of Commissioner (Appeals) except to extent of challenging ground relating to opportunity not granted to WTO. cross-objections are allowed. 15. Rent control regulations govern equities of landlord and tenant relationship in welfare State. Primarily, it is relation between owner of property and his tenant. Even so, law has treated it as social problem governing citizen. inevitable consequence is conferment of certain rights on tenants. rights follow and are restricted by statutory provisions. We have in these appeals really enquiry as to sweep of and limitations on tenants' rights. stand of department in short is that tenancy is right. It is also item of property. It is thus includible in net wealth of tenant as assessee. 16. assessees in present case were tenants in property. They were also wealth-tax assessees prior to earliest assessment years in appeal before us. Admittedly, positive or presumptive value of tenancies had not been included in net wealth of these tenant-assessees in earlier years. From facts detailed above from years 1966-67 to 1970-71, there was dent on tenants' previous position. landlord sold property to another. Avowedly seeking to protect tenancies they were offered alternate accommodation. This was to be given in new property to be constructed by purchaser after demolishing old property. new property came into existence in 1971. After that period, value of flats allotted to these assessees were included by them in their net wealth. There is, thus, interim period between 1966 and 1971, where there was no existing property in respect of which these assessees were tenants. But WTO held that they had right to be tenanted in new property and this right constituted asset to be included in their net wealth for these intervening assessment years over period, thus, when actual tenancy was there, no asset was included. When buildings were demolished, presumptive right to tenancy was valued and included. After construction of new property, flats owned by assessees were included by them in net wealth. question is whether any asset for intervening period ought to have been included in net wealth. And since assessees did not so include property in net wealth, did they not conceal net wealth for which penalties have been levied by WTO? 17. In challenging penalties levied, assessees' learned representative has challenged very assessment itself. He claimed that though appeal was filed, appeal was withdrawn taking into account financial implications and inconveniences. In appeal against penalty, certainly any argument against addition in assessment cannot be raised certainly any argument against addition in assessment cannot be raised if it were to affect assessment itself. For purpose of justifying penalty, however, we see no reason why assessment itself could not be shown to be wrong. If addition itself has been wrongly sustained, there could be no levy of penalty at all. We see no objection to this argument being made by learned counsel for assessees while considering levy of penalty. Whatever be our view on inclusion of asset in net wealth, it cannot affect assessment already concluded. But levy of penalty, it certainly can affect. 18. In our view, there is no justification even for including asset in net wealth. In first place, wealth-tax has referred to tenancy as right in property and, thus, asset includible in net wealth. If this be so, we see no justification for his not including value of this tenancy in case of all assessments of assessees prior to 1966-67. tenancy really existed at that time. It is common knowledge that thousands of tenants inhabit thousands of buildings in Bombay and in other towns of this country. Rent control laws provide protection to extent detailed in statute to all these tenants. present assessees are subject to same rent control laws. Not single case has been brought before us where department has sought to include value of these tenancies either in Bombay or anywhere in India in net wealth of tenant. It, therefore, passes our comprehension why in case of these assessees only lessee's tenancy right in property should be treated as asset to be included in net wealth. If matter is so clear and certain, at least, there would have been other assessments in Bombay or other places where value of tenancy of continuing tenant would certainly have been included in his net wealth. There is no such instance. Even for estate duty purposes, we know not of any instance where protected tenancy of deceased has been treated as property passing on his death and included in estate. 19. above is no mere accident. Though law provides protection to tenant, protection cannot be elevated to level of positive asset which can be included in net wealth of tenant. Bombay Rent Hotel and Lodging House Rates Control Act permits assessee to continue as tenant in certain circumstances as long as be likes. statute also provides certain circumstances in which tenant can be evicted. statute further provides that tenancy cannot be transferred. tenant cannot sublet his premises. Above all, tenancy cannot be transferred for monetary consideration. statute provides for deterrent penalties including imprisonment in case of person who receives money for surrendering his tenancy. Even though, therefore, tenant has limited right to stay on premises for unlimited period, there is no question of tenancy being treated as asset which can be transferred much less be transferred for price. 20. Sections 15(1) and 19 of Bombay Rent Hotel and Lodging House Rates Control Act, clarify above. If tenant accepts consideration for assigning his tenancy rights in premises let to him for his residence, he would be hit by section 19 and be exposed to punishment therein stated. This is so, even where his contract of tenancy allows him to transfer his tenancy rights. This shows extreme limit to which rights of tenant can be pushed. 21. Even though tenancy in building is sometimes spoken of asset n d could be transferred when empowered by contract as provided for by section 15(1), it cannot be transferred for consideration. Its value, therefore, is nil. On contrary, taking consideration for such transfer would attract provisions of section 19(2) exposing transferor tenant to punishment. Even if, therefore, tenant's right can be regarded as property in certain circumstances and for certain purposes, it cannot be asset for purposes of Act or for that matter for Estate Duty Act, 1953. For these enactments, even if Courts have held that transferability or otherwise of asset is not criterion for taxability, certainly determination of market value is essential. If property has no market value and cannot be sold even in hypothetical market, it cannot be included in net wealth or estate passing on death of deceased. Even if theoretically inclusion is justified its value will be nil. On contrary, attempt to transfer this right for monetary consideration would be against public policy and attract penalty under section 19(2). As rightly contended by learned counsel for assessee, WTO cannot import idea of 'asset' to situation where such importation necessarily implies idea of 'asset' to situation where such importation necessarily implies citizen acting against public policy and in fact inviting punishment for breach of statutory provisions. This itself should be sufficient to show that tenancy right as such cannot be included as asset for purposes of wealth-tax. 22. True, we do come across cases where tenancies are surrendered and tenants receive some consideration. Apart from legality or otherwise of this receipt, if any, payment may be for other purposes such as difficulty in getting rid of person or difficulty in getting rid of inconvenient situations. position would be almost like that of blackmailer. If blackmailer receives money from another, certainly it would be incongruous to tax him on ground of asset which brings him that money. 23. learned counsel for department almost giving up stand of WTO, who evaluated 'tenancy' as asset claimed that implicit in various agreements between SB Ltd. and CPP Ltd. and assessees inter se is n asset which belongs to assessees. Continuing this imaginary situation further, learned counsel referred to difference in price of flats offered to assessees and outsiders in new property constructed after demolition of 'Shikar Kunj'. Interesting as argument is, it fails to specify exact asset which is includible in net wealth. If it is department's case that having entered into agreement to obtain place in new building that agreement is source of valuable asset, that has only to be stated for being rejected. In first place, if agreement is source of monetary benefit or for fulfilment of promise, it would be contract that requires support from consideration. provisions of Bombay Rent Hotel and Lodging House Rates Control Act clearly would dub any such consideration as illegal. Secondly, this is at best promise to do something in future. In peculiar circumstances of case, all that these agreements signify would be that if tenant leaves premises and goes away, he would be provided with tenancy at standard rent in new building to be constructed. Standard rent is concept peculiar to premises occupied. If accommodation in new building is different from one in old one, standard rent itself would be several times old rent paid giving tenant scarcely any advantage. 24. More than this, promise of flat in building to be constructed by purchaser of present building after its demolition is commitment which requires several conditions to be satisfied before it can be realised. If for any reason, purchaser refuses to construct building or is incapable of constructing such building or supervening forces prevent him from constructing building what exactly would be remedies open to tenant? In many contingencies, his remedy would be practically nil. maximum perhaps he can expect is compensatory damages could certainly not be equal to price of flat in new building or even commensurate with standard rent. 25. Again, damages could be perhaps recovered if present landlord demolishes his building and starts to construct new building. If demolition and construction of new building is to be done by third person to whom landlord has sold property, we are not sure even recovery of damages would be easy. We are only trying to point out that even if agreement or letters between these three parties are elevated to position of right, it would have absolutely negligible value. learned counsel for assessees described it as precarious asset. We would like to add 'a precarious asset of questionable value'. For wealth-tax purposes, we have to include value of asset. If asset even if exists has only value of abovementioned type, its inclusion in net wealth would not be justified. 26. Under Bombay Rent Hotel and Lodging House Rates Control Act, what tenant is entitled to is alternate accommodation. There are one or two specific details basic to transactions in present case. assessees as tenants agreed to sale and demolition of building. They were promised flat in new building at standard rent. relevant portions of letter dated 7-1-1966 are as under: "(g)(iii) Till sale of said property is completed by us to company, you shall pay rent of Re. 1 per month and after sale of said property is completed in favour of company and till you are put in possession of said duplex flat in new building by company, you shall pay rent of Re. 1 per month to company and from date you are put in possession of duplex flat in new building, you shall pay permissible standard rent in respect of said duplex flat applicable under law to old tenants of old building who are given accommodation in new building after construction in place of accommodation in old building provided that standard rent payable by you shall be duly determined before you are put in possession of said flat. (iv) If at any time after amount of standard rent payable by you is ascertained as aforesaid you desire to purchase duplex flat allotted to you in new building on what is known as 'On ownership basis' company shall sell said flat to you and other tenants at capitalised value of aforesaid standard rent of flat calculated at rate of 7 per cent yield per annum or at cost price of carpet area of new flat whichever is lesser and upon your exercising option, company shall enter into with you necessary agreements as may be required for sale of new flat in your favour." above giving to them choice to purchase Duplex flat has absolutely no relation to continuance of tenancy or security of tenancy under Bombay Rent Hotel and Lodging House Rates Control Act. Apart from fact that purchase is option to tenant-assessees, which they may or may not exercise, even grant of standard tenancy would take place only after building is constructed. Sub-clause (iii) of letter refers to payment of rent of Re. 1 per month. purpose of this payment and its legal implications are unclear. Is it that this payment of Re. 1 per month secures t o assessee benefit of consideration for agreement? No interpretation of this clause can, in our view, lead to such presumption. In our view, all that sub-clause (iii) of clause (g) refers to have absolutely no legal effect especially on ownership of tenancy right or anticipation to get flat in new building. Section 17 deals with case of tenant when owner demolishes building, tenant's right to continue in old building subsists. He may obstruct demolition of old building with subsequent attempts to construct another. Section 17 provides certain safeguards against this. only safeguard tenant has is to have tenement in newly constructed building at legally acceptable rent. If in spite of or against these provisions, tenant were foolish enough to leave tenanted premises, he would have not even any rights under tenancy left to him. If in alternative, tenant does not avail of alternative accommodation granted to him during period of demolition of of alternative accommodation granted to him during period of demolition of old building and construction of new building, even value of alternate accommodation which he would be entitled to, would be lost to him. In present case, whatever be significance of payment of Re. 1 per month, certainly these assessees did not have any alternate accommodation. They cannot, therefore, be said to have even benefit of alternate accommodation they are entitled to under section 17. If instead of being granted and occupying alternate accommodation, tenants were foolish enough to have no alternate accommodation during this period but were looking up to completion of new building, we are unable to understand what rights tenants would have during this interim period. 27. It is true that as matter of fact, in practice, some tenants do receive money for relinquishing tenanted premises. It is also found sometimes that tenants hand over their premises to others for consideration, whereof sometimes landlord also partakes. These, however, are not normal features or legal incidents of Bombay Rent Hotel and Lodging House Rates Control Act. Deviations from normal norms would appear lucrative to people but legal rights cannot on that score be founded on them. option to purchase property at stipulated price based on standard rent or carpet area is entirely extraneous and de hors tenancy agreement or tenancy laws. To refer, therefore, to this 'facility' rightly or wrongly given to tenants as exercisable right in property would be erroneous. It is only extension of same view to hold that differences in price of property given to assessees and given to outsiders secure no assets to assessees. learned counsel for department as well as WTO have made much of difference in prices amounting to Rs. 45 per square ft., which has been made basis of addition. According to us, nothing rests on this difference in price. property owners could as well have given tenants flat in new building with absolutely no payment to be made by them. If allotment of flat is only as tenancy, it would be just obvious application of rent control regulations. In other words, under Bombay Rent Hotel and Lodging House Rates Control Act, assessees could have flat on rent in new building in substitution for old flat surrendered or lost. sale of flat to them in new building is altogether different matter. If in their eagerness to get tenants out of premises for purpose of reconstruction, landlord were to promise sale of flat in new building without even receiving Rs. 53 per square foot, position in law would not change. In fact, we find several cases in city of Bombay, where flats are allotted free to old tenants in new buildings to induce them to vacate premises. For landlord, such allotment is highly profitable. Sometimes one or two old tenants occupying room or two hold up construction of twenty or thirty storeyed building with huge flats. But on account of vast contribution from future owners, landlord makes large profit in newly constructed building. This would outweigh cost of one or other flats given free to old tenants. Neither concessional purchase price nor full relief in purchase price given to old tenants in present case, therefore, can be basis of any addition. 28. More than above, there is fallacy in WTO valuing this 'supposed' asset in manner he has done. He deducted price paid by these assessees from market price on date of allotment in 1971 to outsiders. This difference he included in net wealth for all assessment years 1966-67 to 1971-72. For wealth-tax purposes, value of asset as defined in section 7 of Act as on valuation date is to be included. If assessee has asset of type under discussion on 31-3-1966, certainly its value cannot be same on 31-3-1970. prospects of new construction coming up, its possible price, time when it will be completed, effect of inflation on this price, etc., introduce different variables in computation. If tenant has only right to fresh tenancy under Tenancy Act and is armed with only letter of dubious nature from old landlord, what would be market price which outsider would give to this right even if it is treated as right? We have dealt with earlier about uncertainty, vagueness and precarious nature of this right. In face of these, in our view, no prudent purchaser would purchase this right for any worthwhile amount. On top of it, to hold that he would give difference in price between what outsider paid for flats completed and ready for occupation in 1971 and price paid by assessees on all these valuation dates would be limit of blind optimism. Even if asset as pointed out by WTO exists, its value would be very much low, if not negligible. Nor can its value be same for all these years. Apart from identification of asset omitted, its valuation made by WTO is also, therefore, unjustified. 29. Summarising position: even for assessment purposes, tenant's right to stay in property under protection of Bombay Rent Hotel and Lodging House Rates Control Act is not by itself asset includible in net wealth. Even if it is property it would be property purely personal to tenant and cannot have market value under section 7. Factually, not only in Bombay, but in no part of country does revenue treat tenant's right as asset either for wealth-tax purposes or for estate duty purposes. Where actually tenancy right exists and has even then both from point of legal theory as well as departmental practice been omitted from wealth-tax and estate duty assessments, position of such right after tenancy has disappeared on account of demolition of tenanted building would be still worse. Having not treated tenancy itself when it existed as asset, to treat 'lost' tenancy substituted perhaps by some inchoate and uncertain rights by letter or agreement as valuable asset would be limit of absurdity. Even intangible property of any type cannot be perceived in case of such lost tenancy. only protection or assurance available under Bombay Rent Hotel and Lodging House Rates Control Act is substitution of tenancy at standard rent in new building. If new building does not come into existence, tenant's right gets extinguished. It can at best (perhaps after long litigation) be compensated by damages. nature of this right would be purely contingent not includible in net wealth. Secondly, its value will be negligible. Sale of flat in new building to old tenant would be matter beyond control of Bombay Rent Hotel and Lodging House Rates Control Act. price paid by former tenant for this whether equal to market price or less or nil may be relevant for provision of some other law. It certainly cannot be basis of inclusion of some vague asset in wealth-tax or estate duty proceedings. We have, therefore, no hesitation in holding that inclusion of assets in wealth-tax assessments in present case itself is unjustified and erroneous in law. If assessees had pursued their appeals to Tribunal, we are not sure that additions would not have been deleted. It is natural corollary that penalties based on such additions should not stand. For this reason alone, all penalties should be cancelled. 30. Even otherwise, only reason for enforcement of penalties seems to be fact that assessments have become final. mere conclusiveness of assessment, correctly or incorrectly made, cannot be basis of levy of penalty. Penalty for concealment requires establishment of contumacious conduct on part of assessee. In background of facts described in detail above, if assessees bona fidely believed that this asset is not includible in net wealth, we cannot say that belief was unjustified and pretentious. learned counsel for assessees pointed out that there is no decision of Court also justifying such inclusion. confusion is more when all around one finds that in not single case has value of tenancy been included by department in net wealth of any person. If assessees, therefore, did not return value of these assets in net wealth, they cannot be accused of contumacious conduct. They cannot be subjected to levy of penalty. penalties in present case have been levied under main provisions of section 18(1)(c) itself. Even if Explanation to section is regarded as included in provisions of main section, as was sought to be argued for revenue, penalties cannot be upheld in present case. orders of Commissioner (Appeals) do not, therefore, call for any interference. 31. departmental appeals are dismissed. *** WEALTH-TAX OFFICER v. PREMCHAND JAIN