TMI Blog2018 (4) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... assets and accordingly the construction / set up of office and service center by the assessee and used as such for its business purposes would be outside the ambit of wealth tax in the same manner in which the factory structure or manufacturing establishment is excluded and the beneath land on which such structure to come should have the same wealth tax treatment. The assessee had used the land only for its business purposes by constructing a building in the subject mentioned land and is carrying on its regular business from the said premises. Hence we hold that the land was used by the assessee only for its business purposes. - Decided in favour of assessee. - WTA No. 21/Kol/2016 - - - Dated:- 4-4-2018 - Hon ble Shri Aby. T. Varkey, JM And Shri M.Balaganesh, AM For the Appellant : Shri Manoneet Dalal, AR For the Respondent : Shri Saurabh Kumar, Addl. CIT, Sr. DR ORDER Per M.Balaganesh, AM 1. This appeal is directed against the order passed by the Learned Commissioner of Wealth Tax (Appeals) -4, Kolkata [ in short the ld CWTA] in WTA No. 1632/CWT(A)-6/Circle-10(1)/Kol/14-15 dated 5.10.2016 against the order of assessment framed by the Learned Deputy Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s 2(ea) of the Act. The assessee also submitted that it had commenced construction of its office and service centre on the said land with effect from 18.12.2009 i.e. within two years from the date of acquisition of land. The said land therefore, did not qualify as an unproductive asset. The assessee also submitted that since the land in question did not qualify as a taxable asset u/s 2(ea) of the Act and the fact that the value of motor vehicles did not exceed the threshold limit of ₹ 15,00,000/- , a return of net wealth was not required to be filed under the Act. Subsequently the ld AO issued a notice u/s 17 of the Act dated 12.9.2014, wherein it was contended that he has reasons to believe that net wealth chargeable to tax for the year under dispute has escaped assessment within the meaning of section 17 of the Act. The assessee filed a reply dated 13.10.2014 that it does not hold any assets during the relevant financial year which qualify as assets for the purpose of the Act and hence, it had not filed return of wealth as it was not liable to pay wealth tax under the Act. During the course of assessment proceedings, the assessee was provided with a copy of the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under assessment as well as other years, the assessee-company provided only technical/professional services by deploying its employees to the business premises of different parties viz. BGR Energy Systems Ltd., Durgapur Projects Ltd. and Bharat Aluminium Company Ltd. for this year. vi) All the above named companies deducted tax at source u/s 194J of the I. T. Act, 1961 as is evident from the details of receipts furnished in course of income-tax assessment proceedings for the assessment year in question. vii) The entire receipt of the assessee-company was subjected to Service Tax which established that the assessee-company was only provided services to its clients. viii) The assessee-company did not furnish any documentary evidence to substantiate that its business activities could be termed industrial activities rather than service provider to power companies. ix) The assessee-company was engaged in providing services with know how from others for which royalty has been paid; x) The land was intended to be used for setting up of assessee's office only. It has been clearly mentioned vide para no. 2 at page no.7 of the purchase deed executed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h tax. In this regard, we find that the expression industrial purposes is not defined either in the Income Tax Act or in the Wealth Tax Act. The terms not defined in the statute may need to be understood in a manner which a person in business or in common parlance would generally understand it. The ld AR stated the dictionary meanings of industry as under:- a) As per Oxford Advanced Learner s Dictionary (7th Edition) Industry is , interalia defined, as people and activities involved in producing a particular thing or in providing a particular services . b) West s legal Thesaurus Dictionary (1st Edition) defines Industry as an art, occupation, or business conducted as a means of livelihood or for profit, especially one that is a district branch of trade. c) Webster II defines Industry inter-alia to mean commercial production and sale of goods and services. 6.1. We also find the section 2(j) of the Industrial Disputes Act, 1947, defines the term Industry as under:- (j) 7 industry means any systematic activity carried on by co- operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BHIDCL vide clause 2 of the agreement, wherein it is specifically mentioned that the company can use the land for their business purposes only and not for any other purpose. Further the construction of office building and service centre on the said land had commenced with effect from 18.12.2009 i.e before expiry of 2 years from the date of acquisition by the company. Hence we hold that the constructive utilization of the vacant land was made by the assessee to convert the plot into a business asset. In the assessee s case , eventhough the freehold land was lying vacant as on the valuation date i.e 31.3.2009, yet it was in the process of being converted into a building complex meant for the purpose of accommodating the office of the assessee . The ld AR produced the following documents before us to prove that the construction of building has been completed and the business is being carried on in the said premises :- a) Occupancy certificate / completion certificate issued by New Town Kolkata Development Authority (NKDA) dated 3.10.2016 property comprising of basement, ground floor plus 7 storied building. b) Photograph of the existing building situated at New Town Kolkat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in our considered opinion, as applicable to all industries that are engaged in manufacturing as well as servicing activities. Admittedly the assessee herein is engaged in service activity. Hence we are afraid to give a restricted meaning to the expression industrial purposes used in exception to definition of urban land in wealth tax act. On the contrary, we hold that the expression industrial purpose has been loosely used and hence need to be given a wider import so as bring even the service industry within its meaning. 6.10. We hold that the assets deployed for service activities are treated as productive assets and accordingly the construction / set up of office and service centre by the assessee and used as such for its business purposes would be outside the ambit of wealth tax in the same manner in which the factory structure or manufacturing establishment is excluded and the beneath land on which such structure to come should have the same wealth tax treatment. 6.11. From the aforesaid details, it could be conclusively proved that the assessee had used the land only for its business purposes by constructing a building in the subject mentioned land and is carrying ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
