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Issues Involved:
1. Whether the 1st and IInd floors of "Ramnord Building" given on leave and licence basis to Citibank could be considered as an asset chargeable to wealth-tax under section 2(ea) of the Wealth-tax Act, 1957. Detailed Analysis: 1. Background and Facts: The assessee, engaged in the business of film processing, declared net wealth of Rs. 11,07,682 for AY 1997-98 and Rs. 8,30,800 for AY 1998-99. Due to a lull in business, the 1st and IInd floors of their property were given on leave and licence basis to Citibank. The assessee claimed that the property was used for business purposes and hence was not an asset under section 2(ea) of the Wealth-tax Act, 1957. 2. Assessing Officer's Findings: The Assessing Officer noted discrepancies in the assessee's annual reports and held that the property was not occupied for business purposes. Consequently, the value of Rs. 8,47,40,560 for AY 1997-98 and Rs. 11,10,49,550 for AY 1998-99 was included in the net wealth. 3. Appeal to CWT(A): The assessee contended that leasing out the property was part of their business, citing clauses in their Memorandum of Association. They argued that the property fell within the proviso (3) of section 2(ea)(i), which exempts properties occupied for business purposes. However, CWT(A) dismissed the appeal, stating that the property leased to Citibank was not occupied for business purposes but rather exploited for income. 4. Tribunal's Analysis: The Tribunal examined whether the property could be considered occupied by the assessee for business purposes. It was noted that mere inclusion in the Memorandum of Association and assessment of rental income as business income did not constitute systematic business activity. The Tribunal emphasized that occupation implies actual use and enjoyment of the property, which was not the case as Citibank was the actual occupant. 5. Legal Definitions and Precedents: The Tribunal referred to definitions of "occupy" and relevant legal precedents, including the Supreme Court's judgment in East India Housing & Land Development Trust Ltd. v. CIT, which clarified that rental income from leasing properties should be assessed under "Income from house property." This supported the view that the assessee was not the occupier. 6. Alternate Plea: The assessee's alternate plea under section 4(8) of the Act, claiming they were not the owner, was rejected. The Tribunal noted this was not raised before lower authorities and did not apply as the agreement did not create any right in favor of Citibank. Conclusion: The Tribunal upheld the CWT(A)'s order, concluding that the property leased to Citibank did not fall within the exception of section 2(ea)(i)(3) and thus, its value was rightly included in the net wealth of the assessee. The appeals were dismissed.
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