2018 (5) TMI 1705 - AT - Wealth-tax

Assessment of wealth tax - assessee claims that Thiruvanmiyur property can be taken as self-occupied and the Kodaikanal property can be assessed for wealth-tax - Held that - When the assessee resided at Thiruvanmiyur house and used the premises for his medical profession, it has to be construed as if the property was residential one and self-occupied. Therefore, the Thiruvanmiyur property is exempted from wealth-tax. Coming to the Kodaikanal property, the Ld. Sr. counsel very fairly submitted that it can be subject matter of wealth-tax assessment. Therefore, the Assessing Officer may assess the value of Kodaikanal property for wealth-tax, after valuing the property as per the procedure prescribed in Wealth-tax Act as on the valuation date.

Summary

Issues:
Assessment of wealth tax on properties used for medical profession and self-residence.

Analysis:

The judgment by the Appellate Tribunal ITAT Chennai involved multiple appeals against a common order pertaining to assessment years 2009-10, 2010-11, and 2011-12. The primary issue revolved around the valuation of properties owned by the assessee, particularly a residential house in Thiruvanmiyur and another property in Kodaikanal. The assessee, a medical practitioner, claimed that the Thiruvanmiyur property was used for his medical profession and therefore exempt from wealth tax. The Department's Valuation Officer disputed the share of ownership in the property, leading to a disagreement on the tax liability. The assessee also asserted that the Kodaikanal property was self-occupied and should be subject to wealth tax assessment.

During the proceedings, the assessee's counsel argued that the earning of income is not a determining factor for wealth tax liability; instead, the crucial aspect is whether the property was utilized for professional purposes. The counsel highlighted that even if a part of the house is used for residential purposes, it should not be subject to wealth tax if primarily utilized for professional activities. The Departmental Representative contended that both properties were owned by the assessee, with conflicting claims on their usage.

In its deliberation, the Tribunal acknowledged the dual usage of the Thiruvanmiyur property for residence and medical practice. It opined that if the assessee resided at the property and conducted professional activities there, it should be treated as self-occupied and exempt from wealth tax. Conversely, the Kodaikanal property was deemed eligible for wealth tax assessment, as per the assessee's concession. The Tribunal directed the Assessing Officer to evaluate the Kodaikanal property's value in accordance with the Wealth-tax Act procedures for the relevant valuation date.

Ultimately, the Tribunal partially allowed the appeals filed by the assessee, granting exemption from wealth tax for the Thiruvanmiyur property while permitting the assessment of the Kodaikanal property for wealth tax purposes. The judgment, delivered on 24th May 2018 in Chennai, provided a nuanced resolution to the complex tax implications arising from the dual usage of properties for professional and residential purposes.