2008 (1) TMI 336 - HC - Wealth-tax

Premises given to Citibank on leave & licence basis by the Appellant premises not occupied by assessee for any business or profession carried on by it - submission of assessee that it will be an asset in the hands of Citibank and cannot be included in their net wealth, is not acceptable since it was a license no right would be created in Citibank - premises therefore would fall within the meaning of asset u/s 2(ea), in the hands of assessee and could be included in net wealth of assessee

Summary

Issues: Interpretation of the term "assets" under Section 2(ea) of the Wealth Tax Act, 1957; Application of Section 4(8)(b) regarding rights in a building acquired by a person.

Interpretation of the term "assets" under Section 2(ea) of the Wealth Tax Act, 1957:
The appellant argued that the premises they owned should not be considered as assets under Section 2(ea) of the Wealth Tax Act, 1957, as it was a house occupied for business purposes. However, it was revealed that the premises were actually given on leave and license to Citibank, and the appellant was not using it for any business or professional activities. The Tribunal correctly concluded that the premises did not qualify for exclusion based on the appellant's occupation. Therefore, the appellant's contention was dismissed.

Application of Section 4(8)(b) regarding rights in a building acquired by a person:
Alternatively, the appellant contended that as per Section 4(8)(b), the premises should be considered an asset in the hands of Citibank and not included in the appellant's net wealth. The section referred to acquiring rights in a building through specific transactions. However, it was clarified that the arrangement between the appellant and Citibank constituted a license, not creating any rights for Citibank beyond permissive occupation. Consequently, the Tribunal correctly addressed this issue, leading to the dismissal of the appeal.

Conclusion:
The judgment concluded that based on the premises not being used for business purposes and the nature of the arrangement with Citibank being a license, the question of law raised did not hold. As a result, the appeal was dismissed by the court.