TMI Blog2016 (10) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of 300 days or more. With regard to 1st ground raised by the assessee and assumption of jurisdiction, we find from the records that the ld. AO had not rightly invoked the reopening proceedings as his reason to believe that the wealth tax has escaped assessment from house property belonging to the assessee is not correct. Hence, ground no.1 raised by the assessee is allowed. Commercial complex - whether it is an asset? - Held that:- We hold that the subject mentioned property is a commercial complex and is a productive asset deriving rental income of ₹ 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 ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 issue that the house property under consideration is not an asset for the purpose of wealth tax and the reasons recorded by the Assessing Officer are not valid. 4. The appeal in WTA No.43/Kol/2014 pertaining to assessment year 2006-07, is taken as the lead case. The ld AO noticed that the assessee company received rent of ₹ 15 lakhs during the assessment year 2006-07 from a house property. The rent so received was reflected in the return of income as income from house property. As per the provision of section 2(ea)(ii) of the Wealth Tax Act, 1957. Asset means an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 substantiate its claim that the property under consideration was a commercial complex. The documents produced by the assessee can at best suggest that the property was being utilised for commercial purposes. But then, I find merit in the contention of the AO that a property even if it was being utilised for commercial purposes is includible in the net wealth in view of section 2(ea)(i). Under the circumstances, I am unable to uphold the contention of the assessee that the property at Bangalore was not assessable in its net wealth. Also, I do not find merit i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laining 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 this logic, it is very much clear that wealth tax would also not be levied on such house property from which the assessee is getting rent and the same has been let out by the assessee for a period of 300 days or more. With regard to 1st ground raised by the assessee and assumption of jurisdiction, we find from the records that the ld. AO had not rightly invoked the reopening proceedings as his reason to believe that the wealth tax has escaped assessment from house property belonging to the assessee is not correct. Hence, ground no.1 raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory 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 to tribunal, it was held as follows:- 7. The facts emerges are that total area of land consists of 20164 sft out of which area is 10771 sft namely, the factory building, courtyard, electrical substation, labour quarters, office and godown etc. The assessee rented out this premises to M.S Dalmia Co Ltd for a rent of Rs..12 lakh per annum and this rent was assessed under the head 'Income from House Property. From the very reading of Sub-clause (5) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 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 this logic, it is proposed that wealth tax would also not be levied on such residential properties that have been let out for a period of three hundred days in a year, and, it is also proposed to exempt commercial establishments and complexes from the ambit of Wealth-tax Act. It is, thus, clear that the Legislature has adopted a logic that wealth-tax is not levied ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
