TMI Blog1994 (12) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... as the value as per audited balance sheet of the assessee. (3) The learned CIT (Appeals) has erred in law and on facts in holding that the land under incomplete structure is no longer a plot of land and it cannot be subjected to assessment in the hands of closely-held company. (4) The learned CIT (Appeals) has erred in law and on facts in holding that the basis of adopting value of incomplete structure is wrong. (5) The learned CIT (Appeals) has erred in law and on facts in holding that several factors will directly affect the market value of incomplete structure as on valuation date, which alone can be considered for the purpose of assessment. (6) On the facts of the case, the CIT (Appeals) ought to have upheld the order of the AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t value and, therefore, the value of work-in-progress is to be taken in the total wealth. It is an asset as per definition of section 2(e) of WT Act, and the section does not exclude it either assessee's contention that it is not a usable commodity and before its completion it cannot be called a building, cannot be accepted. A building primarily remains a building though it may be unfinished, it may be diplated or it may be abandoned. Basic character of a building remains, though its face may change many a times. As for its use, term ' use ' cannot be restricted to present. If it cannot be used presently it could not be said that it could not be usable in future. A building may remain unoccupied for years but it still remains building. Capa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trar's office, the learned Asstt. CWT estimated the value of land at Rs. 4,48,398. He accordingly assessed to wealth-tax the work-in-progress and the value of the land. 4. On appeal, the CWT(A) held that incomplete structure was not a building and, therefore, not chargeable to wealth-tax in the hands of the assessee which is a closely-held company. He further held that the land under incomplete construction was no longer a plot of land and it could not be subjected to assessment in the hands of the assessee. 5. Shri P.N. Dixit, learned DR assisted by Shri M.D. Mehra, DVO reiterating the arguments given by the Asstt. CWT in the impugned order, submitted that the learned CWT(A) was not justified in holding that incomplete structure was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted by the Finance Act, 1988, land or building held as stock-in-trade does not form part of net wealth of a company, The learned counsel for the assessee submitted that the proviso inserted by Finance Act, 1988 should be applied retrospectively as it was inserted " with a view to removing the unintended hardship of the closely-held companies". In support of his contentions the learned counsel placed reliance on the following decisions : (i) Nartan Electrical Industries (P.) Ltd v. Asstt. CIT [1991] 36 ITD 448 (Mad.) (ii) WTO v.Priya Holding (P.) Ltd.[1989] 29 ITD 641(Delhi) (iii) Asstt. CWT v. Park Hotel (P.) Ltd [1992] 41 ITD 501 (Cal.). 7. We have considered the rival submissions and perused the facts on record. Section 40 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (3) is in excess of the aggregate value of all the debts owed by the company on the valuation date which are secured on the said assets. Sub-section (3) lists the various assets liable to tax. Item (v) thereof is " land other than agricultural land". Item (vi) is building or land appurtenant thereto used by the assessee as a factory or business premises. Further, the proviso to item (v) of section 40(3) states that nothing in clause shall apply to any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition. The memorandum explaining this proviso indicates that item (v) was intended to refer to unused land Iying vacant and was not intended to refer to land put to use for bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Tribunal Madras Bench "A" in the case of Nartan Electrical Industries (P.) Ltd wherein it has been held as under : " It must be remembered that the land was acquired in February and the valuation date was March in between the construction had started and foundation had been laid. In these circumstances, even though a building as such had not come up so as take this asset into the next item, i.e., ' building or land appurtenant used as a factory ', it would not also be a vacant land lying unused falling under item (v). Therefore, the asset being a land on which factory was under construction was not an asset falling under either item (iv) or under the exception to item (v), that is, building not used for business purpose so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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