TMI Blog2012 (4) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company itself or by the lessor, the assets including land, buildings, plant and machineries always remained as properties in the nature of commercial establishments occupied for the purpose of carrying on business –any property in the nature of commercial establishments or complexes is excluded from the definition of assets liable for wealth tax - in favour of assesee. - WTA Nos. 5 & 6 (Mds) of 2012 - - - Dated:- 13-3-2012 - Dr. O.K. Narayanan, Challa Nagendra Prasad, JJ. ORDER Dr. O.K. Narayanan, Vice-President These two wealth-tax appeals are filed by the assessee. The relevant assessment years are 1997-98 and 1998-99. These appeals are directed against the common order passed by the Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent assessment years 1997-98 and 1998-99 (the impugned assessment years) the assessments were completed under section 143(1) without disturbing the head of income chose by the assessee. The assessment for the intermediary assessment year 1996-97 was anyhow completed under section 143(3) of the Income-tax Act, 1961. In that assessment also, the lease income was offered by the assessee as its business income. The Assessing Officer accepted the position and completed the assessment accordingly. 4. The Assessing Officer for the impugned assessment years 1997-98 and 1998-99, while perusing the assessment records and the details furnished by the assessee, came to the conclusion that the assessee was earning rental income and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court and jurisdictional High Court. 2. The learned CWT(A) ought to have appreciated that the reopening is bad in law and deserves in limine quashing for the reasons, to wit- ( a ) Non furnishing of reasons for reopening, ( b ) Reopening on the basis of audit objection (see IENS 199 ITR 996 SC), ( c ) There exist no reasons to believe nor any tangible materials, ( d ) Change of opinion is not possible, ( e ) W.T. Assessment must be consistent with the finding of the I.T. Assessment, ( f ) Jurisdictional fact must be satisfied before reopening and ( g ) Productive assets cannot form part of taxation under W.T. Act in terms of any of the provisions of the W.T. Act. On merits: 3. The learned CWT(A) fundamentall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete the assessments under section 17(3), we are inclined to agree with the view of the Commissioner of Income-tax(Appeals). No returns were filed by the assessee for the impugned assessment years. Therefore, when the Assessing Officer is of the view that the assessee is liable for wealth-tax, the only option available before the Assessing Officer is to issue notice under section 17 of the Wealth-tax Act, for which a final conclusion need not have been arrived at by the assessing authority. In these circumstances, the Assessing Officer has not formed any earlier opinion and, therefore, the assessee cannot argue that the notices were issued only on the ground of change of opinion. This position is strengthened by the ratio of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Borosil Glass Works Ltd. as a whole, as an operating business asset. The lessee M/s. Borosil Glass Works Ltd. also has been carrying on the same business carried on by the assessee on the strength of the manufacturing facilities acquired on the basis of lease agreement. Even after the lease agreement is executed, the asset is exploited for the purpose of manufacturing glass items. 10. The fact coming out of the above situation is that the nature and character of the properties exploited by the assessee company to carry on its business remained the same even after the properties were let out to M/s. Borosil Glass Works Ltd. Before and after the lease agreement, the nature and character of the assets remained the same. The assets were ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be carried on by the owner itself. It could be seen that the difference in the wordings of items(3) and (5) provides that the emphasis is on the nature of the asset and not on who is carrying on the business. Therefore, what is to be seen is that even though the assessee is receiving lease rent from the lessee, the property remained a commercial asset exploited for the purpose of carrying on manufacturing business. Such assets do not attract levy of wealth-tax. 11. Therefore, we set aside the orders of the assessing authority levying wealth-tax on the assessee for the impugned assessment years 1997-98 and 1998-99. The appeals are partly allowed. 12. As the appeals have already been disposed off, the stay petitions filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
