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2015 (2) TMI 997 - AT - Wealth-taxExclusion of values of land and house property from net wealth - renting out of property - commercial establishment or complex - assets are situated in urban area and have been shown under separate block in the audited accounts - Held that:- The facts emerges are that total area of land consists of 20164 sft out of which area is 10771 sft namely, the factory building, courtyard, electrical substation, labour quarters, office and godown etc. The assessee rented out this premises to M. S. Dalmia & Co Ltd for a rent of ₹ 12 lakh per annum and this rent was assessed under the head ‘Income from House Property’. From the very reading of Sub-clause (5) it is clear that this covers all those properties which are in the nature of commercial establishment or complex meaning thereby that the property must be in the nature of commercial establishment or complex which in turn indicates that the property must also be actually used for the purpose of any business or trade carried on in those commercial establishments or complexes. We are of the view that this Sub-clause (5), "complexes or establishments" are qualified with an adjective 'commercial'. Establishment or complex, therefore, must be of a commercial in nature. The word 'commercial' means something which is used in or related to, a business or a trade. Commercial means relates to or engaged in or used for commerce or trade. The word 'establishment' means an organization, building, construction, shop, store, concern or corporation. Thus, commercial establishment means some kind of place or building or shop or store where business or trade is carried on. Further, the Memorandum explaining the provisions in the Finance No. 2 Bill, 1998, under the head "Incentives proposed under the Wealth-tax Act", it is clarified that wealth-tax is not levied on productive assets. In view of this logic, it is proposed that wealth tax would also not be levied on such residential properties that have been let out for a period of a minimum of three hundred days in a year, and, it is also proposed to exempt commercial establishments and complexes from the ambit of Wealth-tax Act. It is, thus, clear that the Legislature has adopted a logic that wealth-tax is not levied on productive assets, and in view of that logic, it was proposed that wealth-tax would not be levied on such residential property that has been let out for a period of minimum 300 days in a year and to exempt commercial establishments and complexes from the ambit of wealth-tax. Therefore, while construing the meaning to Sub-clauses (4) and (5) inserted by the Finance No. 2 Act, 1998 with effect from 1.4.89. the intention of Legislature is that wealth-tax is not to be levied on productive assets and that is to be kept in mind. In view of the facts of this case and discussion in view of insertion of Sub-clause (5) as inserted by the Finance No. 2 Act, 1998 with effect from 1.4.89 wealth-tax is not to be levied on productive assets. Hence, in view of reasoning given above, we confirm the order of CIT(A) and dismiss both appeals of revenue. - Decided against Revenue.
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