TMI Blog2015 (8) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be brought into the ambit of Wealth as the same falls within the exclusions provided in clause (i) of section 2(ea) of the Wealth Tax Act. - Decided against Revenue. - WTA No.07/PN/2015 - - - Dated:- 31-7-2015 - SHRI R.K. PANDA AND SHRI VIKAS AWASTHY, JJ. For The Assessee : Shri D.S. Dandgaval and Shri S.N. Doshi For The Department : Shri.Dheeraj Jain ORDER PER R.K. PANDA, AM : This appeal filed by the Revenue is directed against the order dated 30-09-2014 of the CWT(A)-I, Pune relating to Assessment Year 2008-09. 2. Facts of the case, in brief, are that the assessee in response to notice u/s.17(1) of the Wealth Tax Act, 1957 filed its return of net wealth on 20-03-2013 declaring wealth of ₹ 5,70,200/-. During the course of assessment proceedings, the AO noted that the assessee has received rental income of ₹ 52,89,426/- from letting out of commercial property. The value of the property at Rent Capitalisation Method comes to ₹ 6,61,17,825/-. Apart from this the assessee also has motor car costing ₹ 16,18,106/-. After allowing the statutory deduction of ₹ 15 lakhs the net wealth comes to ₹ 6,62,97,931/- which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee included lift services, security, power back up and cafeteria space to the clients for which additional bills are raised on monthly basis. It was accordingly argued that this is a commercial property and its exploitation gives rise to the business income and not the rental income and therefore the value of this building cannot be considered as liable under Wealth Tax Act. 5. As regards the objection of the AO that the property has been rented out for less than 300 days, it was argued that the said condition of letting out the property for less than 300 days is applicable to a residential house and in that case the residential property will be treated as an asset. However, the building in the instant case is a commercial property. It was submitted that in the assessment completed u/s.143(3) for A.Y. 2008-09 the AO had assessed the lease charges as business income. The CIT by invoking the provisions of section 263 set aside the assessment order with a direction to complete the assessment afresh. Subsequently, the AO treated the business income claimed by the assessee as income from house property and accordingly assessed the total income at ₹ 33,58,700/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the WTO. He accordingly submitted that this being a covered matter in favour of the assessee the order of the CWT(A) be upheld and the grounds raised by the Revenue be dismissed. 9. The Ld. Departmental Representative on the other hand heavily relied on the order of the AO. 10. We have considered the rival arguments made by both the sides, perused the orders of the WTO 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 the CWT(A) while deleting the addition made by the WTO to the net wealth of the assessee treating the commercial complex as an asset within the meaning of section 2(ea) of the I.T.Act has observed as under : 4.3 The submissions made by the Ld. Counsel for the appellant are carefully examined with reference to the facts of the case and the material placed on record including the order of the ITAT, Pune dated 28/08/2014 passed in ITA No. 987/PN/2013. In the first place, it may be appropriate to refer to the relevant observations of the Tribunal in the order dated 28/08/2014, which are as follows: In this context, in our considered opinion, the issue as to whether impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to concur with the Commissioner that the impugned assessment order has been passed without application of mind. Though the Commissioner has set-up a case that the assessment is based on non-application of mind by the Assessing Officer, but in effect what the Commissioner has sought to show is that there was lack of adequate and proper enquiries by the Assessing Officer. Needless to say, lack of adequate enquiry is a charge which is quite distinct and separate from the charge of lack of enquiry. As per the Hon'ble Delhi High Court in the case of CIT vs. Leisure Wear Exports Ltd. (supra) and by the Hon'ble Bombay High Court in the case of Design Automation Engg. (supra) lack of adequate enquiries cannot be a ground to hold an assessment order erroneous within the meaning of section 263 of the Act. Therefore, having regard to entirety of facts and circumstances of the case, we are unable to uphold the impugned charge made by the Commissioner against the assessment order dated 11.10.2010 (supra). Before parting, we may also refer to another argument set-up by the assessee based on decision of the coordinate Bench of the Tribunal in the case of DCIT vs. Magarpatta Township Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as business centre and a large number of specialized services and facilities were provided in these business centers, like air-conditioning, power backup, water filtration plant, security system through CCTV, state of art computer-telephone integration, video conferencing facilities, secretarial services, the Tribunal held as under: It was clearly discernible from the agreements that the parties had entered into the arrangement with the assessee with the intention of using the services and amenities. The assessee was giving space with services and facilities which were varied and wide and such activities together would definitely constitute an organized structure for making profits and would necessarily constitute a business. Thus the assessee had created a commercial infrastructure and the services rendered were complex commercial /business activities. A perusal of agreements and the stipulations contained therein would not leave any doubt about the commercial character of the relationship between the parties, as distinguished from that merely of a landlord and his tenant. Occupation of space was inseparable from the provision of services and amenities. In Gesco Corporation L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , complex and varied services provided and the huge investment therein were in the nature of plant and machinery which could be included within the expression building or land appurtenant thereto. Thus, the assessee has conducted systematic activity to earn profit and accordingly income was to be assessed as income from business. In view of the submissions made on behalf of the assessee, and analysis of various clauses and Schedule-II of the agreement entered with the I.T. company, CIT(A) was justified in holding that in assessee's case the said income was to be assessed as business income. This reasoned factual finding need no interference from our side. We uphold the same. 4.3.2 Thus, as held by the ITAT Pune in the above cases and the Hon'ble Bombay High Court in the case of Mohiddin Hotels (2006) 284 ITR 229 that when the subject matter that is let out is not a bare tenement, but the complex one with infrastructure facilities, the income derived there from which is not separable from letting out of the building shall not be treated as income from house property. In the present case also, as submitted by the Ld. Counsel and as noted by the ITAT in the aforesaid order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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