TMI Blog2003 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of 1999 - - - Dated:- 24-2-2003 - Judge(s) : D. K. SETH., MAHARAJ SINHA. JUDGMENT D.K. SETH J.-In this case for the assessment year 1993-94, the assessee's commercial building let out to tenants was treated as an asset within the meaning of section 2(ea) of the Wealth-tax Act, 1957, as it stood then. Mr. Khaitan, learned counsel appearing for the appellant, points out that until the provision was amended there was no scope for including a commercial building within the definition of "asset" and, therefore, it was not taxable under the Wealth-tax Act, 1957. In elaborating his contention, he had referred to the charging section, viz., section 3 of the Act, which proposes to impose tax on "net wealth" exceeding a particular valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It may be a commercial building at the hands of the tenant to whom it is let out. The assessment is to be made at the hands of the assessee. For the assessee it is a building. It is immaterial whether it is used for commercial or residential purpose. If the building was let out as residential building, then it could have definitely been taxable as an asset at the hands of the assessee as a residential building. Therefore, the letting out as a commercial building when the same building could be used as residential one could not change the position and would definitely be chargeable as an asset. He also attempted to draw an analogy from the Income-tax Act, 1961, where the income from such property is treated as an income from house property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing used for commercial purpose by the tenant on being let out. The character of the building is the determining factor under the existing provision for making it an asset. Guest house, residential buildings including farm houses were made taxable. But commercial building was not made taxable. The buildings used for business or commercial purpose were not taxable under section 3 of the Wealth-tax Act until amended. The expression used in section 3 before amendment is clear and unambiguous. It had specified the buildings, which were included in the definition of asset. It included guest house, residential building, farm house situated within 25 kilometres of the municipal town. But did not include commercial building. It had specifically r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of assets. Under the existing provisions, assets include guest house, residential house and farm house. It is proposed to include in the definition any house whether used for residential or commercial purposes or as guest house. It is also proposed to exclude any house allotted by a company to its employees, etc., and any house, which is used as stock-in-trade or a house used by the assessee for the purposes of his business." We do not think we need to explain or add anything to it except quoting it: "The term 'assets', on which tax is to be levied, is defined in clause (ea) of section 2. This definition includes any guest house and any residential house (including a farm house situated within 25 kms. of the local limits Of any munici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of law by the assessee or because of his admission or on his misapprehension. If in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. Neither there can be any waiver of the right by the assessee. The Department cannot rely upon any such admission or misapprehension if it is not otherwise taxable. This question was dealt with by this court in Bhaskar Mitter's case [1994] 73 Taxman 437, at paragraph 8 at page 442. In this decision, this court observed: "An assessee is liable to pay tax only upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. The law empowers the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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