2016 (1) TMI 1067 - AT - Wealth-tax

Inclusion of industrial plots and building - wealth tax assessment - Held that - the assessee has contended that in the Asstt.Year 2005-06, the ld.AO has included the value of the industrial plot in the net assessable wealth of the assessee under erroneous interpretation of the provisions. This addition has been deleted by the ld.CWT(A) vide order dated 20.12.2011 in Appeal No.CWT(A)/XI/32/ ACWT Cir.5/10-11. The ld.AO after taking note of the submissions did not assign any cogent reason to include value of the asset in the net assessable wealth. He determined the value of the asset on rent capitalization method. On appeal, the ld.CWT(A) has followed the outcome of the Asstt.Year 2005-06 and deleted the addition. - Order of CWT(A) sustained - Decided against the revenue.

Summary

Issues:
Appeal against deletion of addition in assessable wealth for Asstt. Year 2008-09.

Analysis:

Issue 1: Deletion of addition in assessable wealth
The Revenue appealed against the deletion of an addition of Rs. 6,85,58,254 in the assessable wealth of the assessee for the Asstt. Year 2008-09. The ld.CWT(A) had deleted this addition, citing a similar deletion in the Asstt. Year 2005-06, which was upheld by the Tribunal in a previous case. The assessee contended that the value of the industrial plots and building should not be included in the assessable wealth, as per the provisions of the Wealth Tax Act. The AO had determined the value of the asset using the rent capitalization method, but the ld.CWT(A) followed the outcome of the previous year and deleted the addition. The Tribunal affirmed the lower appellate findings, stating that once the plots were used for commercial/business purposes, they were exempted from wealth assessment under the law. The Revenue failed to provide any distinction on facts or law, leading to the dismissal of the appeal.

Issue 2: Consideration of submissions
The assessee had filed wealth tax returns and responses to notices under the Wealth Tax Act. The AO had included the value of the industrial plot in the assessable wealth, but the ld.CWT(A) had deleted this addition based on the previous year's decision and the provisions of the amended Wealth Tax Act. The CIT (A) accepted the contentions of the assessee, emphasizing that the assets were productive and exempt from wealth tax under specific provisions of the Act. The Tribunal concurred with the lower authorities, highlighting that the assets were used for industrial purposes and therefore fell outside the wealth tax net. The Tribunal's decision was based on a detailed analysis of the law and facts presented, ultimately leading to the deletion of the addition in the assessable wealth.

Conclusion:
The Tribunal upheld the deletion of the addition in the assessable wealth for the Asstt. Year 2008-09, following the precedent set in the Asstt. Year 2005-06. The decision was based on the productive nature of the assets and their exemption under the relevant provisions of the Wealth Tax Act. The Revenue's appeal was dismissed, affirming the lower appellate findings and the Tribunal's decision.