TMI Blog1992 (2) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to wealth-tax by virtue of the provisions of section 40 of the Finance Act, 1983 which revived in a limited way, the levy of wealth-tax relating to companies. According to the said provisions, closely-held companies were liable to wealth-tax for and from the assessment year 1984-85. In the assessments to wealth-tax, the WTO included a sum of Rs. 3,65,37,350 as value of the immovable property at No. 15, Park Street, Calcutta. The assessee-company is having a leasehold interest in the said property for a period exceeding six years. This fact is not in dispute before us. The WTO also included the value of jeeps in the assessments. Against the assessment the assessee-company filed appeals before the CWT(A). It was contended before the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the said provision was a self-contained and separate code by itself and it was not permissible to refer to the provisions of section 2(e) of the Wealth-tax Act to bring to assessment the value of the leasehold interest which the assessee held in the property at No. 15, Park Street, Calcutta. He invited our attention to the provisions of section 40 of the Finance Act, 1983 particularly to sub-sections (2), (3) and (5) of the same. Referring to the provisions of sub-section (5) he submitted that the said provision contained a mandate that except the provisions of section 5, section 7(2)(a) and section 45 of the Wealth-tax Act which have no application to the provisions of section 40 of the Finance Act, 1983, the remaining provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of the Finance Bill, 1983 at 140 ITR/Statute p. 141 at page 175. He, therefore, commended for our acceptance the decision of the CWT(A) on this point. 4. On a consideration of the rival submissions we are of the view that the order of the CWT(A) on this point has to be upheld. The Finance Act, 1960 suspended the levy of wealth-tax on companies from 1961 to 1983. In the year 1983 Finance Act, 1983 revived the levy of wealth-tax on companies but in a limited way. Public companies were not subject to wealth-tax but closely-held companies were subject to wealth-tax. While reviving the wealth-tax on closely-held companies, in his Budget speech the Finance Minister said: " It has come to my notice that some persons have been trying t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of closely-held companies is concerned. Sub-section (2) thereof is definition of "net wealth" and it says that the "aggregate value of all the assets referred to in sub-section (3)" shall be first determined and from this aggregate value the value of the debts owed by the company shall be deducted, and the balance shall be taken as the net wealth of the company. It is clear from sub-section (2) of section 40 that while arriving at the net wealth of the company only those assets which are referred to in sub-section (3) of section 40 can be considered. Sub-section (3) of section 40 lists out various items of assets. Clause (vi) is relevant for our purpose. It says that building or land appurtenant thereto, belonging to the company is to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be applied. As already stated sub-section (3) of section 40 of the Finance Act, 1983 lists out various items of assets that are to be charged to wealth-tax. The immovable property at No. 15, Park Street, Calcutta can be brought to tax in the hands of the assessee-company only if that property belongs to the assessee-company. It is common ground that the said property is not owned by the assessee-company. It would be doing violence to the express provisions of section 40 of the Finance Act, 1983 if the provisions of section 2(e) of the Wealth-tax Act are invoked to bring to tax the leasehold interest of the assessee in the said immovable property even though the lease is for a period exceeding six years. When section 40 of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts are deductible. Similarly, section 7 of the Wealth-tax Act prescribes the basis of valuation. However, sub-section(5) of section 40 of the Finance Act, 1983 specifically excludes the operation of section 7(2)(a) of the Wealth-tax Act. Having regard to the object for which the provisions of section 40 of the Finance Act, 1983 was introduced and accepting the contention of Dr. Pal for the assessee that section 40 of the Finance Act, 1983 is a self-contained code for the levy of wealth-tax on closely-held companies, we uphold the order of the CWT(A) that the leasehold interest of the assessee in the immovable property at 15, Park Street, Calcutta cannot be assessed to wealth-tax. 6. The appeals of the department are dismissed. 7 to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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