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2016 (5) TMI 841 - HC - Wealth-taxProperty included in net wealth - Held that - In a situation like the present one where the possession and control of the property vests with the Assessee to the exclusion of everyone else and it is the Assessee who is exploiting the property for its own purposes it is not open to the Assessee to contend that the property in question does not belong to it. Consequently the question framed is answered in the negative i.e. in favour of the Revenue and against the Assessee by holding that the ITAT erred in holding that the property at 8 and 9 Zamrudpur could not be included in the net wealth of the Assessee for AYs 1989-90 1990-91 and 1991-92. The impugned order dated 29th September 2003 of the ITAT to that extent is hereby set aside. - Decided against assessee
Issues Involved:
1. Whether the value of the property at 8 and 9, Zamrudpur Community Centre, New Delhi, should be included in the taxable wealth of the Assessee under the Finance Act, 1983 read with the Wealth Tax Act, 1957 for various Assessment Years (AYs). 2. The applicability of the principle of consistency in the Revenue's appeals for different AYs. 3. The interpretation of the terms "belonging to" and "ownership" under the Wealth Tax Act, 1957 and the Finance Act, 1983. Issue-wise Detailed Analysis: 1. Inclusion of Property Value in Taxable Wealth: The primary issue was whether the value of the property at 8 and 9, Zamrudpur Community Centre should be included in the net wealth of the Assessee for the AYs 1989-90, 1990-91, 1991-92, and 1992-93. The Assessee contended that since the property was not registered in its name, it did not belong to the Assessee under the Wealth Tax Act, 1957. The ITAT followed the Supreme Court's decision in Nawab Sir Mir Osman Ali Khan v. CWT, which held that unless the property is registered in the Assessee's name, it cannot be included in the net wealth. 2. Principle of Consistency: For AY 1985-86, the CIT(A) had set aside the AO's assessment order and remanded the matter for fresh determination. The CIT(A) had accepted the Assessee's plea that the property was not liable to be included in the net wealth as the lease deed had not been executed. The Revenue's appeal for AY 1985-86 was not maintainable as the Revenue had accepted similar decisions for AYs 1986-87 and 1987-88. The court emphasized the principle of consistency, stating that the Revenue should not take a different stand for AY 1985-86. 3. Interpretation of "Belonging to" and "Ownership": The court analyzed the legislative history and relevant provisions of the Finance Act, 1983 and the Wealth Tax Act, 1957. It noted that the term "belonging to" under Section 2(m) of the WT Act and Section 40(2) of the Finance Act, 1983 has a broader scope than "ownership." The court referred to the Full Bench decision of the Andhra Pradesh High Court in Nawab Mir Barkat Ali Khan v. Commissioner of Wealth Tax, which held that properties transferred under any agreement or arrangement would not be considered as belonging to the individual unless within the scope of Section 4 of the WT Act. The court also referred to the Supreme Court's decision in Poddar Cement Ltd., which distinguished between "ownership" and "belonging to" and held that the Assessee having control and possession of the property should be considered as the owner for tax purposes. Separate Judgments Delivered: The court delivered separate judgments for different AYs based on the specific facts and legal principles applicable to each year. WTA 8/2004 for AY 1985-86: The court held that the Revenue's appeal for AY 1985-86 was not maintainable due to the principle of consistency. The question framed was answered in the affirmative, in favor of the Assessee and against the Revenue. WTA 7/2004 for AY 1992-93: The court held that the building was used for the Assessee's office and thus, its value could not be included in the net wealth under Section 40(3)(vi) of the Finance Act, 1983. The appeal was dismissed, and the question framed was answered in the affirmative, in favor of the Assessee and against the Revenue. WTAs 9, 10, and 11 of 2004 for AYs 1989-90, 1990-91, and 1991-92: The court held that the ITAT erred in excluding the property value from the net wealth of the Assessee. The court emphasized that possession and control of the property by the Assessee indicated ownership. The appeals were allowed, and the ITAT's order was set aside. The question framed was answered in the negative, in favor of the Revenue and against the Assessee. Conclusion: The court concluded that the property at 8 and 9 Zamrudpur should be included in the net wealth of the Assessee for AYs 1989-90, 1990-91, and 1991-92, while for AYs 1985-86 and 1992-93, the appeals were decided in favor of the Assessee based on the principle of consistency and the specific use of the property.
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