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2016 (2) TMI 74 - ITAT KOLKATA

2016 (2) TMI 74 - ITAT KOLKATA - TMI - Inclusion of let out property in the wealth tax assessment - scope and ambit of wealth tax u/s 2(ea)(i)(5) - wealth tax escaped assessment u/s 17 - The assessee claimed that the said property was in the nature of commercial establishment as per section 2(ea)(i)(5) of the Act and thus it could not be included in the net wealth of assessee. - Held that:- the subject mentioned property is a commercial complex and is a productive asset deriving rental income of .....

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JCIT, ld. Sr.DR ORDER Shri M. Balaganesh, AM These appeals of the asesssee arise out of the order of the Learned CIT(A), Central-1, Kolkata in Appeal No. 144/CWT(A)C-I/CC-IV/10-11 dated 1.7.2014 for the Asst Year 2006-07 and in Appeal No. 145/CWT(A)C-I/CC-IV/10-11 dated 1.7.2014 for the Asst Year 2007-08 against the order of assessments framed u/s 16(3) of the Wealth Tax Act, 1957 (hereinafter referred to as the Act ). 2. The issues to be decided in these appeals are assumption of jurisdiction o .....

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ccordingly issued notice u/s 17 of the Act. In response to the said notice, the assessee filed Nil return of wealth on 7.5.2010. The reasons recorded by the Learned AO were duly communicated to the assessee on 31.3.2010. The assessment was completed u/s 16(3) read with section 17 of the Act on 3.12.2010 assessing net wealth of ₹ 59,37,500/- in respect of a property. The assessee had derived rental income of ₹ 15,00,000/- per annum from the said property situated at 12, 8th Cross Stre .....

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same is exempt from wealth tax u/s 2(ea)(i)(5) of the Act was not appreciated by the Learned AO. On first appeal, the Learned CIT(A) upheld the order of the Learned AO. Aggrieved, the assessee is in appeal before us on the following grounds:- 1. That in the facts and circumstances of the case the ld.CIT(A) erred in confirming the action of the ld.AO in initiating proceedings u/s. 147 and assuming jurisdiction u/s. 147. 2. That in the facts and circumstances of the case, the ld.CIT(A) erred in c .....

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ribunal) in support of his contentions. In response to this , the Learned DR vehemently supported the orders of the lower authorities. 5. We have heard the rival submissions and perused the materials available on record. With regard to the first ground raised by the assessee on assumption of jurisdiction, we find from the records that the Learned AO had rightly invoked the reopening proceedings as his reason to believe that wealth has escaped assessment from a property belonging to the assessee .....

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h other allied amenities and had let out the same to M/s Inland Road Transport P Ltd for an annual rent of ₹ 15,00,000/-. Hence the same could be categorised as commercial complex which has been let out for commercial purposes by the assessee. We also find that the tenant had utilized the subject mentioned property only for commercial purposes i.e using the same as godowns. We also find that the Learned CIT(A) had given a finding in his appellate order that from the documents produced by t .....

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perty . The assessee claimed that the said property was in the nature of commercial establishment as per section 2(ea)(i)(5) of the Act and thus it could not be included in the net wealth of assessee. The AO treated the factory premises being the land and building as taxable wealth within the meaning of section 2(ea). The CIT(A) finding that the factory premises was being used for productive purposes and was in the nature of commercial establishment, allowed assessee s claim. On revenue s appeal .....

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roperties which in the nature of commercial establishment or complex meaning thereby that the property must be in the nature of commercial establishment or complex which in turn indicates that the property must also be actually used for the purpose of any business or trade carried on in those commercial establishments or complexes. We are of the view that this Sub-clause (5) complexes or establishments are qualified with an adjective commercial . Establishment or complex, therefore, must be of a .....

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something composed of or made of many interrelated parts, as for example, a multi-purpose building. Thus, the word commercial complex means the commercial multi-purpose building composed and made of inter-relating parts in contrast to a single commercial establishment. In the case of commercial establishment, it is not necessary that it should be composed of or made of interrelated parts. The Legislature has excluded both commercial establishment as well as commercial complexes from the definit .....

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