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2015 (11) TMI 1115 - ITAT KOLKATA

2015 (11) TMI 1115 - ITAT KOLKATA - TMI - Exemption u/s. 2(ea) of the WT Act - whether the Learned CITA is justified in deleting the value of factory shed and godown of ₹ 8,64,76,000/- for wealth tax purposes - Held that:- assessee had derived rental income by letting out its godown cum factory shed to M/s Hindustan Lever Ltd for more than 300 days in the previous year. Any property used for residential or commercial purposes would apparently come under the definition of assets as defined .....

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of the Act. - tenant M/s Hindustan Lever Ltd also had utilized the property for their commercial purposes. We hold that even if the property is utilized for commercial purposes by the tenant, still it is outside the ambit of wealth tax and assessee would automatically fall under the exclusion Clause No. 5 of section 2(ea)(1) of the Act. We find that this issue is covered by the coordinate bench of the tribunal in the case of ACWT vs Merino Exports P Ltd in [2012 (9) TMI 948 - ITAT KOLKATA] - De .....

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arned AO u/s 16(3) read with section 17 of the Wealth Tax Act, 1957 (hereinafter referred to as the Act ). 2. Shri.Rajat Subhra Biswas, the Learned CIT DR argued on behalf of the revenue and Shri. Amit Kumar, ACA, the Learned AR argued on behalf of the assessee. 3. The only issue to be decided in this appeal is as to whether the Learned CITA is justified in deleting the value of factory shed and godown of ₹ 8,64,76,000/- for wealth tax purposes. 4. The brief facts of this appeal is that th .....

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hence pleaded that the subject mentioned property is outside the ambit of taxable assets as per section 2(ea) of the Act. The assessee also pleaded that the subject mentioned property is let out for a minimum period of 300 days in a year and assessee had derived rental income of ₹ 69,18,080/- and hence the property should not be subjected to wealth tax. The Learned AO however did not agree with the contentions of the assessee. The Learned AO deputed his Inspector who gave a report on 13.4 .....

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s let out for more than 300 days in the previous year to M/s Hindustan Lever Ltd and hence exemption u/s 2(ea)(1)(4) of Wealth Tax Act is available to assessee. Since the property was a commercial property and was also used for commercial purposes by M/s Hindustan Lever Ltd , the property is also exempt u/s 2(ea)(1)(5) of the Act. Aggrieved, the revenue is in appeal before us on the following grounds:- 1. For that on the facts and circumstances of the case, the ld.CIT(A) was not justified in del .....

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decision of ACWT vs Merino Exports P Ltd in WTA Nos. 14-16/kol/2011 dated 10.9.2012 in support of his contentions and placed heavy reliance on the Learned CWTA order. 6. We have heard the rival submissions and perused the materials available on record. The facts stated hereinabove are not disputed by the either parties and hence are not reproduced for the sake of brevity. We find that the assessee had derived rental income by letting out its godown cum factory shed to M/s Hindustan Lever Ltd fo .....

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y is a commercial property and not a residential property. Hence we hold that the assessee s case does not fall under the exclusion Clause No. 4 of section 2(ea)(1) of the Act. 6.1 We also find from the Inspector of Income Tax Report dt 13.4.2011 as mentioned in the assessment order that the property consists of 5 asbestos shaded godown and the whole area is industrial area. While this is so, it can safely be concluded that the subject mentioned property is meant for commercial use. We also find .....

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erein the ground raised before this tribunal, facts of the case and the decision rendered thereon are reproduced below:- 3. The brief facts of this issue are that while doing the scrutiny assessment u/s.16(3)/17 of the W.T Act, 1957 the AO included an amount of ₹ 28,66,913/- under the net wealth of the assessee for the year ending 31.03.2004 by observing as under:- Assessee has office space having area 11490 Sq.ft at Mumbai. Out of this 3269 Sq.ft area was let out and remaining was used as .....

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mount of ₹ 27,85,185/- as on 31.03.2007 to the net wealth of assessee for A.yr. 2007-08 on the same property. 3.1 On appeal the ld. CIT(A) hs deleted the same by observing as under:- 3.1 I have carefully considered the submission of the ld.A.r. There is no dispute that factory has been constructed in land of the assessee Company located in Bahadurghrh and the showroom located in Nagpur is a Commercial property. The only reason for addition as mentioned by the AO is that the assessee itself .....

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le wealth as per provision of the Wealth Tax Act. Accordingly the addition of the value of these assets made by the AO is deleted. The appellant will get necessary relief accordingly. 6.1 On careful perusal of the above, we are of the view that since the act has not specified that the assessee himself has to use the said property in order to get exemption u/s. 2(ea) of the WT Act we find no infirmity in the order of ld. CIT(A) to be interfered with. Therefore, we confirm the same and dismiss the .....

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he tenant for its business. 10. we have carefully considered the submissions of the ld. Representatives of the parties and the orders of the authorities below. We have also gone through the cases cited by the ld. Representatives of the parties in support of their submissions (supra). We observe that the cases cited by the ld. Departmental Representative (supra) and also the case of Hon ble madras High Court in the case of Indian Warehousing Industries ltd (supra) relied on by the AO and also rei .....

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s of the business but it was an additional requirement that the said building etc. should be used by the assessee for the purpose of its business only. Similarly, the case of ITAT Kolkata Bench (supra) relied on by the ld. Departmental Representative relates to assessment year 1986-87. It is relevant to state that the definition of asset as applicable to the assessment years under consideration viz. 2003-04 & 2004-05 has been amended by the Finance Act (No.2), 1996 with effect from 01.04.199 .....

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