TMI Blog2011 (12) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... ea)(i) of the Act since the said premises does not provide any commercial facilities available in a commercial complex - It was submitted that a part of the premises was let out to sister concern which is part of their business and hence the property has been used for the purpose of business carried out by the sister concern - the assessee in the instant case has let out a part of its business premises and since the assessee is not in the business of letting out properties, therefore, the said property, in our opinion, is not exempt either u/s.2(ea)(i)(3) or 2(ea)(i)(5) of the Wealth Tax Act - Decided against the assessee - WT Appeal No. 67 to 69/Mum/2011, - - - Dated:- 30-12-2011 - R.K. Panda, Vijay Pal Rao, JJ. A. Puri for the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ea) of W.T. Act, the A.O. was of the opinion that the value of the said asset as per section 7 and Schedule III of the Act is chargeable to tax u/s 4 of the Wealth Tax Act. He, therefore, issued notice u/s 17 of the Act after recording reasons for issue of notice. There was no response from the assessee. During the course of wealth tax assessment proceedings the A.O. asked the assessee to explain as to why taxable wealth should not be computed by including the let out premises at Elcomel House as per provisions of section 7 and Schedule III of the W.T. Act. The submission of the assessee which has been summarized by the A.O. reads as under:- "(i) The assessee company is engaged in the business of conducting hydrographic, oceanographic, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct since the said premises does not provide any commercial facilities available in a commercial complex. Any premises used for the purpose of business cannot be termed as commercial establishment or complex. He accordingly determined the value of the movable properties at Rs.3,51,89,025/- u/s 7 of the W.T. Act by multiplying the net maintainable rent by 12.5. 2.3 Before the ld. CIT(A) it was submitted that the immovable property known as Elcome House is owned by the assessee which is a commercial establishment and is exempt under sub clause (5) of Section 2(ea)(i) of the W. Tax Act. Further, the property is also covered under exclusion in sub clause (3) of section 2(ea)(i) of the W. Tax Act. It was submitted that a part of the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He noted from the agreement dtd. 20.3.1992 with MIDC for plot of land that on page 17 in clause (t) use of the said land has been restricted for the purpose of factory only and not for any other purpose. The same condition has been reiterated in the 2nd schedule to the said agreement on page 28, point No. (3)where again it has been stipulated that the lessee shall not use the land for any purpose except as a factory for manufacturing. This stipulation in the agreement also provides that the nature of the letting out property is not that of commercial establishment or complex. He accordingly distinguished the decision of the Pune Bench of the Tribunal filed before him. Further, he noted that there are certain factual error in the area whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establishment. Referring to the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Shankaranarayana Industries and Plantations (P) Ltd. reported in 194 Taxman 189, he submitted that a commercial asset used by an assessee in business of letting out properties cannot be treated as an 'asset' for the purpose of Wealth Tax. He also relied on the decisions reported in 18 SOT 115, 7 SOT 250 (Mumbai), 89 ITD 221 (Mumbai) and 109 ITD 241 (Pune). 4. The Ld. DR on the other hand, while supporting the order of the Ld. CWT(A) submitted that the Hon'ble Karnataka High Court's decision is in the favour of the Revenue. He submitted that business assets used by the assessee for his business or profession are exempt. Similarly, busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealth Tax Act. The various decisions relied on by the Ld. Counsel for the assessee are distinguishable and not applicable to the facts of the present case. In this view of the matter and in view of the detailed order passed by the Ld. CIT(A) we do not find any infirmity in his order holding that the let out property of the assessee is taxable as per the definition of "asset" under the Wealth Tax Act. The grounds raised by the assessee are accordingly dismissed. 6. Ground of appeal no.2 by the assessee reads as under:- "Without prejudice to Ground No.1 as stated above, the learned CIT of (Appeals) has erred in law in facts of the case in not considering Ground No.2 of the Appeal before him and not giving any finding of the same." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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