2019 (8) TMI 1091 - AT - Wealth-tax

Wealth tax assessment - asset as business asset and not liable for wealth tax - whether 4 6.102 cents of land at Palarivattom, Kochi is not chargeable to wealth tax on the ground that the same was used for parking of vehicles belonging to the employees of the assessee company and hence was a business asset? - admission of additional evidence - HELD THAT - The affidavit filed by the assessee is a fresh document which was not made available with the lower authorities and it is required to be examined by the Assessing Officer so as to find out whether the impugned land has been used as parking space for the employees of the assessee-Company. It is the duty of the assessee to prove the impugned landed property is a business asset when the assessee claimed it is not liable for wealth tax. On the other hand, the CIT(A) observed that the Assessing Officer has to prove it which is not correct. We vacate this finding of the CIT(A). Since the assessee has filed affidavit which was not made available to the Assessing Officer on earlier occasion, we direct the Assessing Officer to carry out necessary enquiries regarding possibility of using the impugned land as parking space for the employees of the assessee and if the land is used as parking space for the employees of the assessee-Company, then the Assessing Officer should treat the said asset as business asset and not liable for wealth tax. With this observation, we remit this issue to the file of the Assessing Officer for fresh consideration. Thus, the grounds of appeals of the Revenue are partly allowed for statistical purposes.

Summary

Issues:
1. Whether the land used for parking by employees can be considered a business asset exempt from wealth tax.
2. Whether the Assessing Officer's decision to subject the land to wealth tax was justified.
3. Whether the CIT(A) correctly deleted the addition of the land value for wealth tax.

Analysis:

Issue 1:
The assessee claimed that the land used for parking by staff was a business asset and not liable for wealth tax. The CIT(A) found no evidence to disprove this claim and concluded that the land was a commercial asset exempt from wealth tax as it was being used for business purposes. The Revenue appealed this decision.

Issue 2:
The Assessing Officer treated the land as a capital asset and subjected it to wealth tax, disregarding the assessee's explanation and lack of evidence. The CIT(A) noted the Assessing Officer's failure to specify the required evidence and recommended a site visit to verify the land's usage. The CIT(A) deleted the addition for wealth tax, emphasizing the lack of evidence against the assessee.

Issue 3:
During the appeal, the assessee submitted an affidavit stating the land was used as a parking space for employees, which was not previously available to the authorities. The tribunal considered this affidavit a fresh document and directed the Assessing Officer to investigate the land's usage as a parking space. The tribunal remitted the issue to the Assessing Officer for further examination, indicating that if the land is indeed used for parking by employees, it should be treated as a business asset exempt from wealth tax.

In conclusion, the tribunal partly allowed the Revenue's appeal for statistical purposes, directing a fresh consideration by the Assessing Officer based on the new evidence provided by the assessee.