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2015 (8) TMI 483 - ITAT PUNE

2015 (8) TMI 483 - 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:- in absence of any contrary material brought to our notice by the Ld. Departmental Representative against the order of the Tribunal [2015 (8) TMI 186 - ITAT PUNE], we find no infirmity in the order of the CWT(A) trea .....

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-2015 of the CWT(A)-II, Nashik relating to Assessment Year 2019-11. 2. The grounds raised by the Revenue are as under : 1. On the facts and in the circumstances of the case and in law, the Ld. CWT(A)-II, Nashik has erred in holding that the said properties namely Building No. E, 1st floor, Building No. A & F 1st Floor and 2nd Floor of Unity Chambers are not assets as per section 2(ea)(i)(5) the Wealth Tax Act, 1957 without appreciating the fact that the assessee had given different treatment .....

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re that the assessee filed his return of wealth on 30-07-2010 disclosing total taxable wealth of ₹ 40,28,900/-. During the course of assessment proceedings the AO noted that the assessee has converted the stock in trade into investment for Building No.E, Ist floor construction account and Building Nos. A and F Ist & IInd floor construction account. As these assets have been converted from stock in trade into capital assets the AO held that these assets are liable for taxation under Wea .....

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. In appeal the Ld.CWT(A) held that the above properties are not assets as per provisions of section 2(ea)(i)(5) of the Wealth Tax Act as these are commercial properties in the nature of commercial complex. The relevant observation of the Ld.CWT(A) at para 6 and 7 of the order reads as under : 6. I have carefully considered the written submissions alongwith documentary evidences filed in support of say and the decisions relied upon in support of exemption claimed. On going through the submission .....

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properties are assets which are taxable under the W.T. Act because the appellant had converted stock-in-trade into capital assets. Accordingly, the AO proceeded with the valuation of the properties as indicated above and the same was brought to tax under the W.T. Act. The appellant had challenged the findings of the AO in appeal by raising the ground that the building in question is a commercial complex, the same is let out for commercial purpose and is not an asset as per section 2(ea)(i)(5) of .....

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mmercial knowledge from the premises. Building No. F, 1st & 2nd floor of Unity Chambers is rented out to LIC for a rent of ₹ 9,10,164/-. The LIC is using the property for its business. 6.2 The appellant has claimed that it is paying municipal tax to Jalgaon Municipal Council for using the premises for commercial purpose. The appellant has offered the rental income to tax for the year under consideration. The appellant has also furnished copies of lease agreements entered with the said .....

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l wealth. The appeal of the appellant is allowed. 5. Aggrieved with such order of CWT(A) the Revenue is in appeal before us. 6. The Ld. Counsel for the assessee at the outset referred to the decision of the Tribunal in the case of Dy.CWT Vs. Smt.Taradevi Ratanlal Bafna vide WTA Nos. 18 and 19/PN/2013 order dated 08- 07-2015 for A.Yrs. 2009-10 & 2010-11 and submitted that under identical facts and circumstances the appeal filed by the Revenue was dismissed where the action of the AO in treati .....

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TO and the CWT(A) and the Paper Book filed on behalf of the assessee. We find an identical issue had come up before the Tribunal in the case of Smt. Taradevi Ratanlal Bafna (Supra). In the said decision, the Tribunal dismissed the grounds raised by the Revenue by observing as under : 10. We have considered the rival arguments made by both the sides, perused 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 d .....

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he income from which are shown under the head income from house property in the return of income filed under the income-tax Act. We find the Ld.CWT(A) allowed the claim of the assessee for non inclusion of the same in the net wealth by following various decisions which has already been reproduced in the preceding paragraphs. We do not find any infirmity in 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 .....

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ourt by its decision dated 18-12-2010 reported in 326 ITR 94 (Bom.) remanded back the matter to the assessing officer to consider the question as to whether the income derived by the assessee from warehousing activity was the business income and whether dominant purpose of letting out the warehouse was the commercial activity of the assessee. Since the activity carried on by the assessee is being reconsidered in the income tax proceedings, by consent, the impugned order passed by the ITAT in wea .....

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use(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 establishment or complexes shall be excluded from the term 'assets' as defined in clause (i) of section 2(ea). Further that it nowhere provides that only if such commercial complex is occupied by the owner then alone the exclusion shall take effect. On both counts thus contention of the Revenue cann .....

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ding an identical issue in favour of the assessee has observed as under : 7. We have carefully considered the rival submissions. Factually speaking, in the present case the issue relates to commercial properties which have been let out by the assessee to different business entities. The claim of the assessee is that the said properties do not fall within the definition of the expression 'assets' contained in section 2(ea)(i) because of the specific exclusion provided in Explanation (5) b .....

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nch of the Tribunal in the case of Satvinder Singh (supra) has observed that in order to cover a case under Explanation (5) below section 2(ea)(i), it is not necessary that the property in the nature of commercial establishment or complex should be occupied by the assessee for the purposes of business or profession carried on by him as was the case in Explanation (3) which excludes any house occupied by the assessee for the purposes of any business or profession carried on by him. For the purpos .....

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s at Market Yard, Pune, are commercial shops used for carrying out commercial activities and the same have been let out and the occupants are using it for such commercial activities. Even with regard to the property let out at Pune Camp and at Lalbaug Society, the same were being used for commercial activities. Even with regard to the Office space at Sharda Arcade, Pune, the assessee pointed out that the same was on rent to Wipro Ltd., and was being used for commercial activities. The aforesaid .....

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