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2016 (8) TMI 232 - GUJARAT HIGH COURT

2016 (8) TMI 232 - GUJARAT HIGH COURT - TMI - Nature of asset - ITAT held that the properties at Worli, Mumbai owned by the assessee was outside the purview of the `asset' because this property was commercial property, ignoring the fact that sub-clauses (4) and (5) of clause (i) of Section 2(ea) were brought on the statute only with effect from 01.04.1999 through the Finance (No.2) Act, 1999 - Held that:- Since the subject property did not fall within any of the three excluded categories enumera .....

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C (hereinafter referred to as ITAT) dated 23.06.2006 in WTA No. 1/Ahd/2006 for the Assessment Year 1997- 98, the revenue has preferred the present Tax Appeal for consideration of the following substantial question of law: (A) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the properties at Worli, Mumbai owned by the assessee was outside the purview of the asset' because this property was commercial property, ignoring the fac .....

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) of the Wealth Tax Act. The Assessing Officer thus taxed the value of the said property while computing taxable wealth. On appeal the CIT (Appeals) allowed the appeal following the decision of the Tribunal in assessee s own case for A.Y. 1996-97 and 1998-99. On appeal before the ITAT by the revenue, by impugned judgment and order, ITAT dismissed the appeal holding that the property in question was outside the purview of asset because the said property was commercial property. 3. Being aggrieved .....

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held as under. 7. A perusal of the provisions of section 2(ea) of Act, as it stood prior to 01.04.1997 shows that any land or building used for commercial purposes was not included within the ambit of the expression assets as defined thereunder, and as such, the property of the nature involved in the present case did not fall within the scope and ambit of the expression assets prior to 01.04.1997. However, with effect from 01.04.1997, the definition of assets has been amended and the words comm .....

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e local limits of any municipality) except assets mentioned in sub-clauses (1) and (2) of this clause. If residential houses have been taken as assets, there seems to be no reason why commercial properties, other than those used by the assessees wholly and exclusively in his business or profession, should also not be taken as assets. By an amendment, commercial buildings, which are not occupied by the assessee for the purpose of his business or profession, other than the business of letting out .....

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under clause (i) of section 2(ea) of the Act which are: (1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or director who is in wholetime employment, having a gross annual salary of less than two 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; 9. Examining the facts .....

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he Act. In this regard it may be germane to note that by the Finance (No.2) Act, 1998 with effect from 1.4.1999, section 2(ea) came to be amended whereby two additional categories which are excluded from the definition of assets thereunder, came to be introduced vide sub-clauses (4) and (5) to clause (i) of section 2(ea) of the Act, so as to provide exemptions from wealth-tax in respect of any residential property that has been let out for a minimum period of 300 days in the previous year and al .....

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