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TMI Blog2016 (10) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer under section 17/16(3) of the Wealth-Tax Act, 1957 (in short, the Act), dated 3/12/2010 & 2/12/2010 respectively. 2. Both these appeals (cited above) pertain to same assessee and common issues involved, therefore these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 3. The common issue to be decided in these appeals is, assumption of jurisdiction of the ld. Assessing Officer by issuance of notice under section 17 of the Act and whether in the facts and circumstances of the case, the house property which has been let out to a tenant would be outside the ambit of wealth tax under section 2(ea)(i)(v) of the Wealth Tax Act, 1957.The assessee raised the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition, the AO assessed the net wealth at Rs. 59,37,500/- under section 17/16(iii) of the Act. Aggrieved, the assessee filed an appeal before the Commissioner of Income-Tax (Appeals), Central-I, Kolkata who has also confirmed the order of the AO, observing the following: "4. The Ld AR appeared for the assessee and challenged the impugned order by making oral and written submissions. The Ld AR contested the action of the AO on the ground that the property under consideration was a commercial complex and consequently the same was exempt in view of section 2(ea)(i)(5). I have perused the assessment order and considered the submissions made on behalf of the assessee. I find that the assessee could bring no positive material on record to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in treating the commercial complex as an asset for the purpose of the wealth tax." 4.2 The Ld AR for the assessee has submitted that the Assessing Officer reopened the assessment under section 17 of the Wealth Tax Act, without and base, presuming that house property has escaped from the wealth tax. The ld. AO treated the let out house property as an asset under section 2(ea)(ii) of the Wealth Tax Act, 1957, whereas it is a productive asset and does not fall in the ambit of wealth tax.The ld. AR for the assessee submitted that the memorandum explaining the provision in the finance No.2 Bill, 1998 under the head "incentives proposed under the Wealth Tax Act", it is clarified that wealth tax is not levied on productive assets. In view of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate bench decision of this tribunal in the case of WTO vs Ferrolite Products Ltd reported in (2015) 55 taxmann.com 285 (Kolkata Tribunal). The facts before this tribunal in the said case is that the assessee rented out premises to 'D' Ltd and rental income was assessed under the head 'income from-house property'. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness or trade is carried on. The word "complex" means composite, compounded, multiple, manifold, multi-complex or 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 interrelating 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 definition of "asset" for the purpose of chargeability to tax under the Act. Further, the Memorandum explaining the provisions in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d property is a commercial complex and is a productive asset deriving rental income of Rs. 15,00,000/- per annum. It is well settled from the Memorandum explaining the provisions in the Finance No. 2, 1998 under the head "incentives proposed under the wealth tax act" that wealth tax is not to be levied on productive assets. 5.1. Hence respectfully following the said decision, we hold that the subject mentioned property shall be exempt u/s 2(ea)(v) of the Act and therefore outside the ambit of taxable wealth. Accordingly, the ground no.2 raised by the assessee in this regard for both the assessment years are allowed." 5.2 In the result, both the appeals( WTA No. 43/Kol/2014 & WTA No. 44/KOL/2014) of the assessee are allowed. Order Pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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