TMI Blog2004 (2) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Appellate Tribunal was right in law in holding that the assessee engaged in construction and leasing of warehouses was not liable to wealth-tax in respect of the value of the warehouses as they were exempt under the provisions of section 40(3) of the Finance Act, 1983?" In order to appreciate the question of law, it is necessary to notice the facts in brief. The assessee is a company. One of the objects stated in the memorandum of association relates to letting out of godowns. The assessee-company had let out godowns to the Food Corporation of India. In response to the notice issued under section 17(1)(a) of the Wealth-tax Act, the assessee had filed a return indicating "nil" wealth. It was the contention of the assessee tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , other than building or part thereof used by the assessee as factory, godown, warehouse, hotel or office for the purposes of its business or as residential accommodation for its employees or as a hospital, crèche, school, canteen, library, recreational centre, rest room or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part: Provided that each such employee is an employee whose income (exclusive of the value of all benefits or amenities not provided for by way of monetary payment) chargeable under the head 'Salaries' under the Income-tax Act does not exceed eighteen thousand rupees;" On a bare perusal of the provision it is apparent that under section 40(3)(vi), building or land appurte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry building, as the assessee itself was not carrying on manufacturing and the building was being used as a factory by the lessee who had installed machinery therein and was using the same for the manufacture of cork which was the business of the lessee. The use of the building as a factory and the business carried on therein was by the lessee of the assessee and not by the assessee. Moreover, even the assessee had accounted for the rental income from that property as income from other sources and not as business income. We, therefore, do not find any error in the order of the Tribunal as also of the statutory authorities who have rightly held that the factory building was not to be excluded while considering the assets required to be valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich owns machinery and leases such machinery to third parties for manufacture of articles is entitled to investment allowance of such machinery under section 32A of the Income-tax Act. Even though at the first glance such decision appears to support the contention of the assessee, but on deeper scrutiny, we are of the view that the ratio of the said decision is not applicable to the present case. To attract the provisions under section 32A, as observed by the Supreme Court, the assessee must satisfy the following conditions: "(1) the machinery should be owned by the assessee; (2) it should be wholly used for the purposes of the business carried on by the assessee ; and (3) the machinery must come under any of the categories specified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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