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2015 (8) TMI 186 - ITAT PUNE

2015 (8) TMI 186 - ITAT PUNE - TMI - Enhancement in value of net wealth - Denial of exemption claim - AO denied the exemption claimed on the ground that these are single immovable properties and do not quality as commercial establishment - CWT(A) allowed exemption claim - Held that:- sub-clause(5) of clause(i) of section 2(ea) nowhere requires that a commercial establishment or a complex cannot be established in a house property. It only provides that any property in the nature of commercial est .....

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) who has also followed the above decisions while deciding the issue in favour of the assessee we find no infirmity in the order of Ld.CWT(A) excluding the 3 properties from the ambit of net wealth. Accordingly, the same is upheld and the grounds raised by the Revenue are dismissed. - Decided against Revenue. - WTA Nos.18 and 19/PN/2013 - Dated:- 8-7-2015 - Shri R.K. Panda and Shri Vikas Awasthy, JJ. For the Petitioner : Shri Sunil Ganoo For the Respondent : Smt Sunita Billa P. Singh ORDER PER R .....

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n of wealth on 31-12-2009 declaring total wealth at ₹ 2,74,70,300/-. Subsequently, the assessee filed a revised return of wealth on 15-07-2011 declaring total wealth at ₹ 3,28,14,200/-. As this return of wealth was not filed in time it was considered as nonest and thereafter the AO issued notice u/s.17 of the Wealth Tax Act in response to which the assessee filed the wealth tax return disclosing net wealth of ₹ 5,69,98,800/-. 3. During the course of assessment proceedings the A .....

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ties to the net wealth and determined the net wealth at ₹ 36,74,22,230/-. 4. Before CIT(A) the assessee made elaborate submissions. Based on the arguments advanced by the assessee the Ld.CIT(A) upheld the addition made by the AO to the net wealth in relation to the property situated at Joshipeth, Jalgaon and at Vidya Niketan Society, Aurangabad for which the assessee is not in appeal before us. 5. So far as the addition of the value of the 2 immovable properties situated at Mumbai and one .....

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Mumbai, there is no dispute that these properties are let out on rent to branches of "The ORIENTAL BANK OF COMMERCE". In short, my findings are as under: (a) The AO has relied upon the decision in the case of "Nutan Ware Housing (P) Ltd vs DYCWT reported in (2010) 38 DTR (Pune) (Trib) 59" and denied the exemption. I am of the opinion that it is not squarely applicable to the facts of the appellant. The appellant has also elaborately established, as cited supra, as to how the .....

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laimed and relied upon by the appellant. (b) Further, I do not agree with the view of the AO that merely because of the rental income received from the said properties viz at Chembur, Thane and at Fort, Mumbai, are shown by the appellant under the head of "income from house property" and hence, the appellant is not entitled for exemption under the W T Act. From the facts, I am of the considered opinion that said rental income shown, either under the head of "Income from House Prop .....

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that the assessee was earning income from house property and offering the same to tax under the Income Tax Act, after claiming deduction as provided in section 24 of the said Act, is also of no consequence...." Therefore, A.O's contention is not correct. (c) Considering entire facts, copies of purchase-deed and lease rent agreement of said properties, which was rented out to "The ORIENTAL BANK OF COMMERCE", I am of the considered opinion that these three properties are certai .....

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uated at (i) Siddhachal shopping complex, Ground floor Phase-1,Siddhachal Complex,2nd Pokhran Road of Thane, (ii) Khushali CTS no.1358.Plot No.358, Central Avenue Road, (near Diamond Garden),Chembur.(iii) Mumbai Fort property; B-1, B-2, Jash Chambers, Ground floor and Basement, Phirozshah Mehta Road, Fort, Mumbai, cannot be sustained. Further, considering the aforesaid factual background of the case, all the above Bombay properties are certainly covered by the exception provided in sec.2(ea)(i)( .....

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ial establishments or complexes. 2. On the facts and circumstances of the case, whether the Ld CIT(A) was correct, when the assessee, as per submission made in Appellate proceedings has submitted that these respective properties / unit are itself existing in commercial complexes and as such these respective properties are not commercial establishments or complexes in their own capacity. 3. The appellant craves leave to add, alter, modify, delete amend any of the grounds with prior permission of .....

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nding is plural term and denotes more than 1 unit of property. He submitted that the order of the CWT(A) is silent on the issue as to how the single units do qualify u/s.2(ea)(i)(5) of the Wealth Tax Act to be exempt. He submitted that when the section is very clear, there was no necessity of any interpretation. Referring to the decision of the Pune Bench of the Tribunal in the case of Nutan Warehousing Company Pvt. Ltd. (Supra) he submitted that in the said case it has been held that the essenc .....

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T(A) should be reversed and that of the order of the AO be restored. 8. The Ld. Counsel for the assessee on the other hand heavily relied on the order of the CWT(A). He submitted that the decision relied on by the AO in the case of Nutan Warehousing Co. Pvt. Ltd. (Supra) has been set aside by the Hon ble Bombay High Court to the file of the AO. Therefore, the same is no longer binding and cannot be followed. Referring to the decision of the Hon ble Gujarat High Court in the case of Vasumatiben C .....

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by the assessee/owner alone for getting the benefit. 9. Referring to the decision of the Pune Bench of the Tribunal in the case of Satvinder Singh Vs. DCIT reported in 109 ITD 241 he drew the attention of the Bench to the following head note : The properties or the houses of a nature specified in sub-cls. (1) to (5) below cl. (i) of sub-s. (ea) of s. 2 are an exception to the main provision. The exception provided in sub-cls. (1) to (5) must, therefore, be considered in relation to the main or p .....

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erties or the houses enumerated in the sub-cls. (1) to (5) from the main enactment, the intention of the legislature becomes clear that the legislature did not intend to bring all buildings or land appurtenant thereto whether used for residential or commercial purposes within the ambit of "assets" chargeable to tax under the WT Act. Thus, the question of rendering the cl. (i) being redundant does not arise. 9.1 Referring to the above decision, he submitted that the Tribunal has further .....

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the orders of the Assessing Officer and the CWT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case the AO denied the exemption claimed by the assessee in respect of the properties situated at Thane, Chembur and Fort Mumbai on the ground that these are single immovable properties and do not quality as commercial establishment, which according to the AO denotes wide agglomeration of many units and as su .....

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the order of the CWT(A) on this issue. So far as the decision of the Pune Bench of the Tribunal in the case of Nutan Warehousing Co. Pvt. Ltd., (Supra) is concerned we find the Hon ble Bombay High Court vide WTA Nos. 2807,2808,2925,2926,3421/2010 order dated 16-06-2011 has restored the issue to the file of the AO for reconsideration of the issue afresh by observing as under : 2. The question raised in these appeals is, whether ITAT was right in holding that the warehouses used in warehousing bus .....

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vity carried on by the assessee is being reconsidered in the income tax proceedings, by consent, the impugned order passed by the ITAT in wealth tax proceedings are quashed and set aside and the matter is restored to the file of the assessing officer for reconsideration of the issue afresh and in accordance with law. Therefore, much importance cannot be given to the decision of the Tribunal cited (Supra) which has been relied on by the AO. 10.1 We find the Hon ble Gujarat High Court in the case .....

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ch commercial complex is occupied by the owner then alone the exclusion shall take effect. On both counts thus contention of the Revenue cannot be accepted. It is significant to note that exception sub-clause (3) of clause (i) of section 2(ea) pertains to any house which the assessee may occupy for the purposes of any business or profession carried on by him. Thus whenever legislature desired that exclusion may apply only if property is self occupied, it was so provided. Significantly, in sub-cl .....

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e definition of the expression 'assets' contained in section 2(ea)(i) because of the specific exclusion provided in Explanation (5) below section 2(ea)(i) on the ground that they are in the nature of "commercial establishments or complexes". 8. Explanation (5) below section 2(ea)(i) covers any property in the nature of "commercial establishments or complexes". As per the Revenue, the aforesaid properties, though being used for commercial activities, are let out by the .....

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nation (3) which excludes any house occupied by the assessee for the purposes of any business or profession carried on by him. For the purposes of applying Explanation (5) to section 2(ea) the nature and use of the property is material. Following the aforesaid precedent, it is clear that in order to evaluate a claim for exclusion based on Explanation (5) to section 2(ea)(i) of the Act, the assessee has to demonstrate that the property is in the nature of commercial establishment or complexes, th .....

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