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2016 (7) TMI 50 - GUJARAT HIGH COURT

2016 (7) TMI 50 - GUJARAT HIGH COURT - TMI - Net wealth - whether the land on which the building was under construction is to be included in the net wealth for the purpose of charge of wealth tax u/s.2(ea) and was not excluded u/s.40 clause (v) r.w explanation 1 ? - Held that:- Tribunal was justified in holding that the CIT(A) was not justified in excluding the land on which building was under construction from the purview of charge to wealth-tax. This Court vide the aforesaid decision has held .....

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st the assessee. - TAX APPEAL NO. 327 of 2008 With TAX APPEAL NO. 328 of 2008 - Dated:- 9-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR SN SOPARKAR, SENIOR COUNSEL WITH MRS SWATI SOPARKAR, ADVOCATE FOR THE OPPONENT : MR KM PARIKH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgment and orders passed by the Income Tax Appellate Tribunal, Ahmedabad Bench D , Ahmedabad (hereinafter referred to as th .....

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e of charge of wealth tax u/s.2(ea) and was not excluded u/s.40 clause (v) r.w explanation 1 ? 2. The assessing officer had assessed the total income of the assessee at ₹ 1,50,66,500/- vide his order dated 13.03.2006 as against the returned income of ₹ 1,10,696/- in case of assessment year 2001-02 and ₹ 1,58,59,922/- as against the returned income of RS. 82,036/- vide order dated 13.03.2006 so far as assessment year 2002-03 is concerned. The assessee challenged the said order b .....

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ot following the order of Ahmedabad Tribunal which is binding on it. He submitted that the Tribunal has erred in upholding the order passed by the assessing officer. 4. Mr. K.M. Parikh, learned advocate appearing for the respondent supported the impugned order passed by the Tribunal and submitted that the Tribunal has not committed any error in passing the same. He submitted that in fact in view of the decision of this Court rendered in Wealth Tax Reference No. 267 of 1996 on 05.10.2006 wherein .....

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t has observed as under: 8. The issues referred for our opinion are as to whether the value of the factory building and the research building under construction and not in actual use for business were liable to tax and whether by allowing the claim of the assessee, the appellate Tribunal had caused violation to the plain and simple language used in section 40 (3) (vi). Both the issues clearly referred to and were exclusively related with the provisions and language of clause (vi) of sub-section .....

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eal question would be, whether the words ?building or land appurtenant thereto? covered the land and the building under construction thereon. It must be noted here that, if the building under construction were not to be regarded as ?building?, then the land on which the construction is started will have to be included in the assets under clause (v) because ?land? mentioned therein does not carry any qualification or the adjective ?vacant?. Even otherwise, land does not lose its value as an asset .....

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that view, we respectfully disagree with the view taken by the Delhi High Court in Prem Nath Motors (supra). It may be apposite to quote here the following observations of the Supreme Court in its Three Judge Bench decision in Ahmed G.H.Ariff And Others v. Commissioner of Wealth Tax, Calcutta [1970 (76) ITR 471]: .....It was held that the definition of ?assets? in section 2 (e) and that of ?net wealth? in section 2(m) were comprehensive provisions and all assets were included in the net wealth .....

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nded to include property of every description.? 8.1 Plain reading of clause (vi) would clearly show that prospective or intended use of the building is irrelevant and the exception clause could be invoked only when the building or the land appurtenant thereto is already and actually used by the assessee for any of the specified purposes. Therefore, a building under construction can never fall under the exception clause. In that view of the matter, the view taken by the Tribunal on the basis that .....

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