TMI Blog2007 (8) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... alth-tax in the hands of the assessee-company - 159 of 1999 - - - Dated:- 2-8-2007 - M. M. KUMAR and AJAY KUMAR MITTAL JJ. Yogesh Putney for the Commissioner. Sanjay Bansal with Parvesh Saini for the assessee. JUDGMENT The judgment of the court was delivered by M. M. Kumar J.- At the instance of the Revenue the Income-tax Appellate Tribunal, Delhi Bench "B", New Delhi (for brevity," the Tribunal"), has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (for brevity, "the Act"), which is stated to have emerged from I. T. A. No. 675/Del/92 from its order dated March 16, 1998, in respect of the assessment year 1987-88 : "Whether, on the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessed at Rs. 27,00,000, which was subject to rectification. The assessee pleaded before the Assessing Officer that the factory building and machinery amounting to Rs. 15,00,000 was transferred to the subsidiary company, however, no documentary evidence in support of transfer was furnished. The Assessing Officer estimated the value of the building at Rs. 10,00,000 and added the same to the net wealth of the assessee. The Assessing Officer also came to the conclusion that as per section 40(3)(iv) of the Finance Act, 1983, building or land owned by an assessee is to be included in the net wealth unless the building was used by the assessee as a factory. Since in the instant case the building or land was not used as a factory by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the income-tax assessment of the assessee for the assessment year 1987-88. The Assessing Officer was also directed to take a fair market value of the land as on March 31, 1987, at Rs. 9,00,000 on the basis of rent capitalisation method. 3. The Revenue as well as the assessee preferred further appeals against the order dated March 30, 1992, passed by the Commissioner of Wealth-tax (Appeals) before the Tribunal. The Tribunal after exhaustively dealing with the pleadings put forth before it by the Revenue as well as the assessee, dismissed the appeal filed by the Revenue and allowed the appeal of the assessee. The findings of the Tribunal are discernible from paragraphs 6.14 to 6.18 of its order dated March 16, 1998, which reads as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Tulsidas V. Patel P. Ltd. v. WTO [1998] 65 ITD 287 WTA No. 1063 (Bom)/94, dated June 17, 1997. The Tribunal in the said decision has observed as under (295) : "Under sub-section (2) of section 40 the Finance Act, 1983 ; the crucial words which require interpretation are belonging to the company". The Legislative mandate is that all the assets enumerated in sub-section (3) of section 40 belonging to the assessee-company should be considered to be assets of that company for the purpose of levy of wealth-tax. The Calcutta Tribunal unfortunately did not bestow its pointed attention on the crucial words 'belonging to the company' and also did not interpret the correct meaning of words before deciding that leasehold interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the aforesaid facts and decisions, we are of the opinion that the value of the factory building which had already been transferred by the appellant-company in favour of M/s. R. Narayan Co. P. Ltd. cannot be assessed in the hands of the appellant-company. The appellant-company had received the full consideration for transfer of the said factory building. It has also handed over the physical possession of the property to the vendee. The vendee is using and enjoying the said property without any hindrance or obstruction on the part of any one including the vendor, which the vendor could not do in view of section 53A of the Transfer of Property Act. The asset in question cannot, therefore, be treated as belonging to the appellant-company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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