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M/s. Veerprabhu Marketing Ltd Versus J.C.W.T (OSD) , Cir-8, Kolkata

2016 (4) TMI 550 - ITAT KOLKATA

Exemption u/s 2(ea)(i)(5) of the Wealth Tax Act - CWTA bringing the warehouse to wealth tax by not treating the same as a commercial establishment warranting exemption u/s 2(ea)(i)(5) of the Act - Held that:- In the instant case, it is not in dispute that the Learned AO had accepted the rental income derived from letting out of the warehouse as income from business. It is not in dispute that the assessee had indeed derived income from handling and transportation of food grains and claiming deduc .....

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Port to wealth tax. - Decided in favour of assessee - WTA No. 50/Kol/2014 - Dated:- 4-3-2016 - Shri Mahavir Singh, Judicial Member And Shri M. Balaganesh, Accountant Member For the Appellant : Mrs. Arti Debnath, CA, ld. AR For the Respondent : Shri Sridhar Bhattacharya, JCIT, ld. Sr.DR ORDER Shri M. Balaganesh, AM This appeal of the assessee arises out of the order of the Commissioner of Wealth Tax (Appeals),Kolkata in Appeal No. 238/CWT(A)-VIII/11-12 dated 9.9.2014 against the order of wealth .....

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ar 2006-07 by declaring taxable wealth of ₹ 23,58,300/-. The Learned AO computed the net wealth of the assessee at ₹ 4,12,95,000/- by making an addition towards warehouse at Kandla Port used by the assessee for the purpose of business by holding the same as an asset chargeable to wealth tax u/s 2(ea) of the Act. The Learned AO observed that the assessee owned a warehouse at Kandla Port and was in receipt of rent amounting to ₹ 93,65,273/- from the same. The assessee had not sho .....

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om the storage of food grains but also earning handling charges and transportation charges, since all the activities are integrated in nature and accordingly claimed that the said warehouse is used for the purpose of business of the assessee. The assessee had also claimed deduction u/s 80IB(11A) of the Income Tax Act, 1961 in respect of this activity carried out in Kandla Port warehouse which has been granted by the Learned AO. The assessee claimed that the it has shown handling income of ₹ .....

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ces of the case, the learned Commissioner of Income Tax (A) erred in affirming the Assessing Officer s computation of net wealth of the assessee at ₹ 4,12,95,000/- as against the net wealth of ₹ 23,58,300/- returned by the assessee, and ignoring the fact that the concerned warehouse is a commercial establishment u/s. 2(ea)(i)(5) of the Wealth Tax Act and is being used by the appellant for its own business activity specified u/s. 80IB. 4. We have heard the rival submissions and peruse .....

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ower authorities. We find that the assessee had filed a detailed paper book containing the various income tax assessment orders for the Asst Years 2006-07 , 2009-10 , 2010-11 & 2011-12 together with the copies of income tax returns and tax audit report for the assessment year under appeal. We find from the scrutiny assessment orders passed by the Learned AO in income tax proceedings, the deduction claimed u/s 80IB of the Act by the assessee out of profits derived from the integrated business .....

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nclusions, wherein warehousing activities does not become eligible for exemption u/s 2(ea)(i)(3) or 2(ea)(i)(5) of the Act. But the Learned AR rightly pointed out before us that the said tribunal decision has been set aside by the Hon ble Bombay High Court in Wealth Tax Appeal No. 2807 ,2808, 2925, 2926 and 3421 of 2010 dated 16.6.2011 in the case of Nutan Warehousing Co P Ltd, Pune vs CWT, Pune, wherein the questions raised and decision rendered thereon are as below:- 2. The question raised in .....

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rpose 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 wealth tax proceedings are quashed and set aside and the matter is restored to the file of the assessing officer for reconsideration of the issue afresh and in accordance with law. In view of the above, the reliance placed by the revenue on the Pune Tribunal (supra) .....

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lsied for business purposes by the assessee and hence exempt u/s 2(ea)(i)(3) of the Act . It is also in the nature of commercial establishments and hence exempt u/s 2(ea)(i)(5) of the Act . We also draw support from the co-ordinate bench decision of this tribunal in the case of Aessen Pvt Ltd vs ACWT in WTA N os. 36,37 & 38/Kol/2010 dated 6.5.2011 which also placed reliance on the decision of Pune Tribunal in the case of Satvinder Singh vs DCIT reported in (2007) 109 ITD 241 (Pune) and held .....

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in the nature of commercial establishments/ complexes which were not chargeable to wealth-tax. The Assessing Officer rejected the assessee's claim by holding that the properties given on rent were in the nature of commercial house properties, but not commercial establishments/ complexes. The matter came before the Tribunal. The Tribunal after considering the submissions of the parties held that item (5) of sub-clause (i) of clause (ea) of section 2 of the Wealth Tax Act excluded both commer .....

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to a business or a trade. Commercial means relating to or engaged in or used for commerce. The word "establishment" means an organization, building, construction, shop, store, concern or corporation. Considering the above definition of asset, it was held that the let out properties, which are in the nature of commercial establishments or complexes, could not be included while computing taxable net wealth of the assessee. 9. We are of the considered view that the above decisions of ITA .....

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