Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Britannia Industries Ltd. Versus D.C.W.T., Circle-7, Kolkata

Guest House - Addition to wealth tax - meaning of Sec.2(ea)(i) - asset - the flat at Chennai was located near the appellant's factory and was used by its employees for accommodation purposes. - reopening of such assessments on the ground that the flat at Chennai was in the nature of guest house and therefore constituted an “Asset” under section 2(ea) of the Act, was only a conclusion arrived at on a change of opinion by the AO and on reexamination of the facts that were already on record - Held .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on behalf of the Assessee. We therefore hold that the flat at Chennai cannot be regarded as “Asset” within the meaning of the Act.

It can be seen from the provisions of the IT Act, that “Accommodation in the nature of a guest house has been given an extended meaning under Explanation to Sec.37(4) and Sec.37(5) of the IT Act. Such extended meaning cannot be applied under the provisions of the Act, especially in the context of Sec.2(ea) of the Act, defining the term “Asset” for the purp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Act. - Decided in favour of assessee. - WTA Nos.13-17/Kol/2014 - Dated:- 11-9-2015 - Hon ble Shri N.V.Vasudevan, JM & Shri Waseem Ahmed, AM For the Appellant : Shri D.S.Damle, Advocate For the Respondent : Shri Niloy Baran Som, JCIT, Sr.DR ORDER Per Bench : These are appeals by the Assessee against 5 orders all dated 19.12.2013 of Commissioner of Wealth Tax (Appeals)-XVI, Kolkata relating to AY 2000-01 to 2004-05. 2. These appeals arise under the provisions of the Wealth Tax Act, 1957 ( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, Chennai at the cost of ₹ 65,15,014 on 1.3.1999 and the same was sold during the AY 2005-06. On further perusal of the wealth tax records, the WTO noticed that the said Guest House flat was not included in the Wealth Tax returns for the various AYs in question. According to the WTO as per the definition of assets u/s.2(ae)(i) of the Act, any building or land appurtenant thereto used for the purpose of maintaining a guest house is covered in the definition of assets for the purpose of comp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessee which included the flat owned by the Assessee at Chennai. The wealth tax returns so filed were processed u/s.16(1) of the Act. The reopening of such assessments on the ground that the flat at Chennai was in the nature of guest house and therefore constituted an Asset under section 2(ea) of the Act, was only a conclusion arrived at on a change of opinion by the AO and on reexamination of the facts that were already on record. Therefore it cannot be said that there was reason to believe t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the nature of guest house for the purposes of Section 2(ea)(i) of the WT Act, 1957. The appellant submits that the flat was purchased with a view to minimize the costs on boarding & lodging of the employees travelling to Chennai on company's official work. The flat was purchased on pure business considerations and commercial expediency. Had the appellant not purchased transit accommodation for its employees, it would have had to incur humongous costs towards the hotel & lodging ex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ujarat High Court in the case of CIT vs. Gujarat Industrial Development Corporation (170 CTR 19) wherein the High observed that any accommodation exclusively used by the assessee for the purpose of providing accommodation to its employees during their visit on official tour cannot be considered as a "guest house". The word "guest house" in its ordinary sense is suggestive of any accommodation maintained for extending hospitality to a 'guest' or an outside visitor and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se" as alleged by the Wealth-tax Officer. In light of definition given by the High Courts, the flat was a transit accommodation of the appellant for its employees and not a "guest house". Since the said flat does not qualify as guest house for the purposes the wealth tax; the addition of R.s.58,79,800/- made while assessing the net wealth deserves to be deleted in fully. The appellant further submits that the provisions of Section 2(ea)(i) of the Wealth-tax Act, 1957 as follows: & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed by a company to an employee or an officer or a director who is in whole time employment, having a gross annual salary of less than five lakh rupees; (2) any house for residential or commercial purposes which forms part of stock in trade; (3) any house which the assessee may occupy for the purposes of any business or profession carried on by him; (4) any residential property that has been let out for a minimum period of three hundred days in the previous year; (5) any property in the nature of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dispute that the said flat was used in the course and for the purposes of the appellant's business. Accordingly even presuming that the flat at Chennai was a "guest house";then also the said flat fell within the exception provided in sub-clause (3) of Section2(ea)(i)of the Income-tax Act, 1961. The provision of Section 2(ea)(i) includes any building and land apparent thereto used for the purposes of maintaining guest house but if such building or guest house is used for the purpos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to 2004-05,the Assessing Officer did not dispute the fact that the flat at Chennai was used by the appellant for its business purpose and therefore allowed the expenditure incurred in relation to the aforesaid property. On the same ground the AO also allowed depreciation u/s. 32 on the cost/WDV of the flat at Chennai. This clearly establishes the fact that the flat at Chennai was used for business purposes and therefore qualified for exemption u/s. 2(ea)(i)(3) of the WT Act, 1957. Attention in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y the company itself for the purposes of its business, even though no business is actually carried on in such premises and therefore notional annual value cannot be assessed. Relying on the above cited judicial precedents, the appellant submits that the Chennai flat was meant for exclusive use of its employees while on visit to the appellant's factory in Chennai and was occupied by the appellant's employees in the course and for the purposes of the appellant's business. In the afores .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said submissions of the Assessee both on the question of validity of initiation of reassessment proceedings and on the question whether the flat at chennai constituted Asset within the meaning of the Act. The observations of the CWT(A) on the question whether the flat at Chennai constituted an Asset within the meaning of the Act, were as follows: I have duly considered the submissions of the appellant. The facts of the cases mentioned by the appellant in the submission are different and distingu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r any subsequent year, means - (i) Any building or land appurtenant thereto (hereinafter referred to as house ), whether used for residential or commercial purposes for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality, Municipal Corporation or by any other name) or a Cantonment Board Therefore, the facts and circumstances that the palatial property located at Chennai and used for visiting emp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reiterated submissions as were made before the CWT(A). A copy of the judgment of the Hon ble Gujarat High Court was also filed before us. The learned DR relied on the order of the CWT(A) and further placed reliance on the decision of the Hon ble Calcutta High Court in the case of Kesoram Industries and cotton Vs. CIT 191 ITR 518 (Cal) wherein the Hon ble Calcutta High Court took the view (vide para-13 of its judgment) took the view in the context of deduction u/s.37 of the Income Tax Act, 1961 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

within the meaning of Sec.2(ea)(i) of the Act. The Hon ble Gujarat High Court agreed with the view of the Tribunal that the same had to be regarded as falling within exception clause (3) as well as (5) to Sec.2(ea)(i) of the Act. The following were its relevant observations. Having heard both the sides, we have carefully gone through the orders of the authorities below. It is pertinent to note that the assessee-company is not engaged in the business of letting out of properties. In the case of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

have close liaison with the Directorate of Petroleum, Department of Energy and Petrochemicals in its day-to-day business liability. The decision of the Hon ble Bombay High Court in the case of Anand Estate Pvt. Ltd. (supra) relied the Ld. D.R. pertained to the assessment years 1997-98 and 1998-99 when clause (5) which was inserted in section 2(ea)(i) of Wealth Tax Act by Finance (No.2) Act, 1998 was not there. In our opinion, this property falls within the exceptions under sub-clause (5) of cla .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

et wealth under section 2(ea)(l)(5) and, as such, value thereof is not includible in the net wealth chargeable to tax under the Wealth tax Act. Therefore, the decision of the Hon ble Bombay High Court in the case of Anand Estate Pvt. Ltd. (supra) relied by the ld. D.R. is not applicable in this case. Apart from this, in the assessment year 2001-02, the Learned Commissioner of Wealth tax (Appeals) assessed the rental income under the head income from business . This fact is not controverted by th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssee is maintained for the purpose of business. Therefore, its value is not includible in net wealth of the assessee for both the assessment years under clause (3) as well as clause (5) of section 2(ea)(i) of the Wealth Tax Act, 1957. The view taken by the Learned Commissioner of Wealth Tax (Appeals) in respect of guest-house is also upheld for both the assessment years. Having heard learned counsel for the Revenue and having perused orders on record, we find that the CIT(A) as well as the Tribu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Directorate of petroleum, Department of Energy and Petrochemicals. This was done by the direction of the Government. The main purpose of this arrangement was to have close liaison with the Directorate of Petroleum. It has also come on record that the guest house at Hazira was located at the distance of 30 K.M. from Surat, it was in the vicinity of the exploration site of the assessee. In the said guest house as per the need of the business, the officer of the joint venture and subsidiary compani .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce managers, administrative staff and engineers from other units. Thus the flat was used for the purpose of business of the Assessee. The decision of the Hon ble Gujarat High Court clearly supports the contention raised on behalf of the Assessee. We therefore hold that the flat at Chennai cannot be regarded as Asset within the meaning of the Act. 6.3. As far as the decision of the Hon ble Calcutta High Court in the case of Kesoram Industries and Cotton (supra) is concerned, the same was rendere .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

odation being hereafter in this sub-section referred to as "guest house"); (ii) in relation to the assessment year commencing on the 1st day of April, 1971, or any subsequent assessment year, no allowance shall be made in respect of depreciation of any building used as a guest house or depreciation of any asset in a guest house: Provided that the aggregate of the expenditure referred to in clause (i) and the amount of any depreciation referred to in clause (ii), shall, for the purposes .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation : For the purposes of this sub-section,- (i) residential accommodation in the nature of a guest house shall include accommodation hired or reserved by the assessee in a hotel for a period exceeding one hundred and eighty-two days during the previous year; and (ii) the expenditure incurred on the maintenance of a guest house shall, in a case where the residential accommodation has been hired by the assessee, include also the rent paid in respect of such accommodation". "(5) For th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Highlight: Levy of additions tax u/s 115O on distribution of dividend - shares of its profits declared as distributable among the shareholders is not impressed with the character of the profit from which it reaches the hands of the shareholder - not to be bifurcated as agriculture and non-agriculture dividend - SC

Highlight: Rate of GST on old and scrap buses - 28% or 18% - at such initial tender process initiated by the Respondents-KSRTC, the present petitions filed by the petitioners are premature and misconceived and do not require any interference by this Court at this stage. - HC

Forum: Rent a cab operator

Highlight: In view of amendment made u/s 132A of the Income Tax Act, 1961 by Finance Act of 2017, the 'reason to believe' or 'reason to suspect', as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal, SC dismissed the appeal of the assessee

Highlight: Validity of Assessment Order - period of limitation u/s 153 (2A) is applicable even if the entire order was not set aside but matter was remanded back for for limited aspects with directions - HC

News: Note ban was a shake-up, achieved its main objectives

Notification: Amendments in the notification No.5/2017- Integrated Tax (Rate) dated the 28th June, 2017.

Highlight: Levying interest u/s 234C - interest is to be charged on the returned income and not on assessed income.

Highlight: Accrual of income - sale of right to develop and sell incentive FSI under LOI - till the conditions of LOI are fulfilled transfer is not complete and income does not accrue to the assessee

Highlight: TPA - determination of ALP - TP adjustment by applying Bright Line Test (BLT) is not sustainable on protective basis having no statutory mandate.

Highlight: Safeguard Duty - Advance License Scheme - as there is no exemption from safeguard duty leviable under Section 8C, which is imposed on the goods imported from China, the importer has to pay safeguard duty

Highlight: Manufacture - process of cutting of waste plastic container - Such plastic containers before and after cutting are nothing but waste / scrap - Not a manufacturing activity as no new product emerges.

News: NITI Aayog and Govt. of Assam organizes workshop on health sector reforms in Guwahati; launches SATH- Sustainable Action for Transforming Human Capital

Notification: Seeks to amend notification no. 5/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding restriction of refund on corduroy fabrics

Notification: Seeks to amend notification no. 2/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst exemptions

Forum: GSTR 3B Rectification

Notification: seeks to exempt Skimmed milk powder, or concentrated milk

Notification: Seeks to amend notification no. 2/2017- integrated tax(rate) dated 28.06.2017 to give effect to GST council decisions regarding GST exemptions.

Forum: 3B mistake

Notification: Seeks to amend notification no. 1/2017- central tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates

Notification: Seeks to amend notification no. 1/2017- integrated tax(rate) dated 28.06.2017 to give effect to gst council decisions regarding gst rates.

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

News: Notification Issued For GST Actionable Claim On Branded Food Products

Highlight: Classification printed computer stationary/manifold Business Forms - to be classified under Chapter Heading 4820.00 or under Chapter Heading 4901.90 - items like A4 sheets, advertisement and job card to be classified under Chapter 49

Forum: GST Invoice

Article: Websites of Government Departments need lot of improvement. We are noticing detoriations in them for example, case of website of ITAT.

Article: RCM – Applicability to persons not liable to get registered us 23(1)

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

Article: 20 Things You must know about E Way Bills in GST Law

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities – Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version