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TMI Blog2015 (2) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(a) erred in directing the A.O. to exclude the values of land and house property from net wealth though the assets are situated in urban area and have been shown under separate block in the audited accounts." 3. Briefly stated facts are that the assessee in its Balance Sheet filed along with return of income declared land and building at 160, B. L. Shah Road, Kolkata-700 053i.e. land and building separately. The total area of land consists of 20164 sft out of which covered area is 10771 sft namely, the factory building, courtyard, electrical substation, labour quarters, office and godown etc. The uncovered area is about 9393 sft on which construction is not permissible. This fact is admitted by AO vide his remand report dated 12.02.2010 and further supported by assessment order for AY 2002-03 dated 24.12.2009. But the AO in these two years noted that the assessee being the owner of land and building valued at Rs. 1,54,03,300/- and Rs. 8,26,948/- respectively is a taxable asset in term of section 2(ea) of the Act. The assessee rented out this premises to M. S. Dalmia & Co Ltd for a rent of Rs. 12 lakh per annum and this rent was assessed under the head 'Income from House Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - "16. The exception provided in Sub-clauses (4) and (5) below to Clause (i) of Subsection( ea) of Section 2 has been inserted by the Finance (No. 2) Act with effect from 1.4.99. In the Budget Speech of Minister of Finance, the Hon'ble Finance Minister has stated that housing is an area which requires our utmost attention, and, therefore, he proposed several incentives to encourage house building activity. Amongst several incentives to encourage house building activities, an exemption to certain specified properties like commercial complexes under the Wealth-tax Act was provided. (See para 100 of Finance Minister's speech reported at page 69 (St) of 231 ITR). In the Notes on Clauses on Finance Bill No. 2, 1998, it is stated that Clause 69 of the Finance Bill No. 2. 1998, seeks to amend Section 2 of the Wealthtax Act relating to definitions. Sub-clause (b) of Clause 69 seeks to amend Subsection (ea) of Section 2 of the Wealth-tax Act relating to the definition of assets for the purpose of Wealth-tax. Vide this clause, it was proposed to exclude let-out residential properties from the definition of asset in case the property has been let out for a period of at-least 300 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential or commercial purposes, may not come within the definition of "asset" as defined under Clause (i) of Sub-section (ea) of Section 2 of the Wealth-tax Act if any one of them is found to be covered by Clauses (1) to (5) below to Section 2(ea)(i) of the Act. Sub-clauses (1) to (5) qualifies the generality of the main enactment by providing an exception and taking out from the main provision a portion which but for the exception provided in Sub-clauses (1) to (5) would be the part of the main provision. The properties or the houses of a nature specified in Sub-clauses (1) to (5) below to Clause (i) of Subsection (ea) of Section 2 are an exception to the main provision. The exception provided in Sub-clauses (1) to (5) must, therefore, be considered in relation to the main or principal enactment of Clause (i) of Sub-section (ea) of Section 2 of the Wealth-tax Act to which these Sub-clauses (1) to (5) stand as an exception. The properties or houses enumerated in these Sub-clauses (1) to (5) must not be read as alien to the main provision. In this view of the matter we, therefore, do not find any conflict between the main enactment of Clause (i) and the exceptions provided in Sub-cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, 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. The word "complex" means composite, compounded, multiple, manifold, multi-complex or something composed of or made of many interrelated parts, as for example, a multi-purpose building. Thus, the word 'commercial complex' means the commercial multi-purpose building composed and made of inter-relating parts in contrast to a single commercial establishment. In the case of commercial establishment, it is not necessary that it should be composed of or made of interrelated parts. In the case of a property in the nature of commercial establishment, it is not necessary that it should be also in the nature of commercial complex. The Legislature has excluded both commercial establishment as well as commercial complexes from the definition of "asset" for the purpose of chargeability to tax under the Wealth-tax Act. Therefore, for the purpose of Sub-clause (5) of Clause (i) of Sub-section (ea), property must be of commercial complex or establishment in nature where business or trade are being carried on and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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. This would mean that any house, which is not by its very nature in the nature of commercial establishment or complex, but is occupied for the purpose of any business or profession carried on not by the assessee but by somebody-else, shall be included in the definition of "asset" as would be clear from reading together the main provisions contained in Clause (i) together with exceptions provided in Sub-clauses (3) and (5). Therefore, the CIT (A)'s observation that if the interpretation canvassed by the assessee is to be accepted it would make Section 2(ea)(i) inoperative because every building or part of building used for commercial purposes shall be claimed to be a part of commercial establishment or complex, is not correctly made out. Merely because any building or land appurtenant thereto is used for commercial purposes would not that by itself is sufficient To bring it within the ambit of commercial establishment or complex unless it is also established and proved that the said building by its very nature is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that any building or land appurtenant thereto used for commercial purposes would not come within the ambit of Sub-clause (2). (3). and (5) unless for the purpose of Sub-clause (2) it forms part of stock in trade, for the purpose of Sub-clause (3) it is satisfied that the house was occupied by the assessee himself for the purpose of any business or profession carried on by him and for the purpose of Sub-clause (5) property itself was in the nature of commercial establishment or complex and used in a business or trade carried thereon. 23. One of the reasons given by the AO in rejecting the assessee's claim of treating the properties in question as exempted, was that the provisions of Sub-clause (5) of Clause (i) of Sub-section (ea) of Section 2 are applicable only in the case of property as a single unit because the word used there is "any property in the nature of commercial establishments or complexes", but in the case of the assessee there is no single unit, but there are four properties in four separate buildings. This approach taken by the AO, in our considered view, is not found to be on sound footing. In the main provisions as well as in the exception clauses, the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is anything repugnant in the subject or context.- (1) words importing the masculine gender shall be taken to include females; and (2) words in the singular shall include the plural, and vice versa. 27. In the enactment provided under Section 2(ea)(i), no contrary Legislative intent has been given. We are, therefore, of the view that single is included in plural, and if a plural word is used, the singular automatically comes within its ambit. Therefore, "any house", or "any property", or "any building" shall include all houses, or some of them or one of them, as the case may be. Therefore, merely because the assessee has 4 commercial establishments or complexes at 4 different places can that by itself be a basis to hold that the property in question does not come under the purview of "any property in the nature of commercial establishment or complexes". If the assessee owns more than one property in the nature of commercial establishment or complexes, the exemption shall be available to all such properties and cannot be restricted to any one of them." 6. From the proposition discussed by coordinate bench Pune Tribunal in the case of Satvinder Singh, Supra, we have to examine t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts" 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. The word "complex" means composite, compounded, multiple, manifold, multi-complex or something composed of or made of many interrelated parts, as for example, a multi-purpose building. Thus, the word 'commercial complex' means the commercial multi-purpose building composed and made of inter-relating parts in contrast to a single commercial establishment. In the case of commercial establishment, it is not necessary that it should be composed of or made of interrelated parts. The Legislature has excluded both commercial establishment as well as commercial complexes from the definition of "asset" for the purpose of chargeability to tax under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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