2012 (9) TMI 948 - AT - Income Tax

Summary

Issues involved: Revenue's appeal against the order of ld.CIT(A)-Central-I, Kolkata for A.Yrs. 2004-05, 2005-06, and 2007-08 regarding the treatment of properties as being used for commercial purpose and their taxability under the Wealth Tax Act.

Treatment of properties for commercial purpose:
The AO included amounts under the net wealth of the assessee for the years ending 31.03.2004, 31.03.2005, and 31.03.2007, based on the properties being leased out and not used for the assessee's own business purposes. The ld. CIT(A) deleted these additions, stating that the nature and purpose of the use of the property by the assessee are crucial under the Wealth Tax Act, regardless of whether the property is used for the assessee's business. The revenue appealed this decision.

Legal interpretation and decision:
The ld. DR argued that since the assessee did not use the property for its commercial purposes, the AO's view should be upheld. However, the ld. Counsel for the assessee contended that section 2(ea) does not mandate the assessee's personal use of the property for commercial purposes. Upon reviewing the provisions of section 2(ea)(5) of the Wealth Tax Act, the tribunal found no requirement for the assessee to use the property personally to qualify for exemption. Consequently, the tribunal upheld the ld. CIT(A)'s decision to delete the additions, dismissing the revenue's appeal.

Conclusion:
The tribunal confirmed the decision of the ld. CIT(A) regarding the taxability of the properties under the Wealth Tax Act, dismissing the revenue's appeals. The order was pronounced on 10.09.2012.