TMI Blog2012 (6) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent action of further amending the said section, that the intention was not to tax business assets used by the assessee for the purpose of his business or profession and also the business assets which are let out, if the assessee is in the business of letting out properties. All other types of commercial properties were brought to tax under the Wealth-tax Act. Assessee was justified in claiming the exclusion of the properties which are the subject of the matter of the proceedings, from wealth-tax – In favor of assessee - 54 and 55 of 2004 - - - Dated:- 11-8-2010 - KUMAR N., KEMPANNA H. S., JJ. JUDGMENT N. Kumar J.- 1. These two appeals are by the Revenue challenging the orders passed by the appellate authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is a commercial building, it is excluded from the definition of the word "asset" as is clear from the circular issued by the Board of Revenue. Aggrieved by the said order, the Revenue preferred appeals. The Tribunal also affirmed the said issue and dismissed the appeals. Therefore, the Revenue has filed these appeals before this court. 3. At the time of admission, the following substantial questions of law are framed : "1. Whether the appellate authorities were correct in holding that the property owned by the assessee at M. G. Road, Bangalore, which had been let out on rent could not be treated as an asset for the purpose of wealth-tax and brought to tax ? 2. Whether the appellate authorities were correct in holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes any guest house and any residential house (including a farm house situated within 25 kms. of the local limits of any municipality) for levy of tax, except the exclusions made in items (1) and (2) of sub-clause (1) of this clause. If residential houses have been taken as assets, there seems to be no reason why commercial properties, other than those used by the assessees wholly and exclusively in his business or profession, should also be not taken as assets. It is, therefore, proposed to tax commercial buildings, which are not used by the assessee in this business or profession, 'other than the business of letting out of properties'." The amendment to the Explanation to the provisions of the Finance (No. 2) Act, 1996, rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and any residential house (including a farm house situated within 25 kms. of the local limits of any municipality) except the assets mentioned in sub-clauses (1) and (2) of this clause. If residential houses have been taken as assets, there seems to be no reason why commercial properties, other than those used by the assessees wholly and exclusively in his business or profession, should also be not taken as assets. By an amendment, commercial buildings, which are not occupied by the assessee for the purpose of his business or profession, other than the business of letting out properties, shall be brought to tax under the Wealth-tax Act, 1957." The said amended section was in force only for two years by the Finance Act (No. 2), 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mulate investment in productive assets. Therefore, Parliament thought it fit to abolish the amended Act, excluding the business assets, i.e., the commercial establishments, which are not used by the assessee or which are let out, as they are not stimulative investment. However, as is clear from the aforesaid Explanatory Notes, the Central Board of Direct Taxes circular and the subsequent action of further amending the said section, it is clear that the intention was not to tax business assets used by the assessee for the purpose of his business or profession and also the business assets which are let out, if the assessee is in the business of letting out properties. All other types of commercial properties were brought to tax under the Weal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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