2021 (5) TMI 820 - AT - Wealth-tax

Wealth tax assessment - Computation of net wealth - AO while determining the value of the assets and net wealth, as considered the photographs of the property/assets submitted by the Assessee and the value of the entire assets including the land and building as determined by the Sub-Registrar, Visakhapatnam who had adopted a comprehensive value of ₹ 1.95 crores for both the land and structures vide registration deed dated 20/02/2008 - HELD THAT - Commissioner considered the Form No. 23AC submitted by the Assessee to the ROC and observed that from the record, it is seen that small structure standing on the piece of land is in dilapidated condition and the photographs of the property confirms the position. Assessee failed to demonstrate the fact that the structure was used for business purpose. Assessee failed to prove the point that the relevant property was utilized for business purpose. The Ld. Commissioner further held that it is not the case of the Assessee that the property was used for residential purpose or any other meaningful purpose. Ultimately, the ld. Commissioner observed that small and dilapidated structure of the Assessee is not functionally useful and was neither utilized for business purpose nor residential purpose and therefore, the AO is justified in stating that given the size of the land/plot, section 5(1)(vi) is attracted Nothing specific was pointed out to fault the determination of the value of the assets and therefore we concur the finding of the ld. Commissioner to the effects that the case of the Assessee does not fall in the category of house and the land appurtenant to the house. We are unable to find out any reason to controvert the finding of the authorities below, hence, we do not any hesitation to hold that the order under challenge does not suffer from any perversity, impropriety or illegality, consequently, the same is liable to be upheld. Appeal of the Assessee deserves dismissal.

Summary

Issues Involved:
- Exemption claim under section 2(ea)(i)(3) of the Wealth Tax Act
- Valuation of assets under Rule 3 of Schedule III of the Wealth Tax Act
- Claim of exemption under section 5(1)(vi) of the Wealth Tax Act
- Assessment of the assets' value by the Sub-Registrar
- Dismissal of the Assessee's appeal by the ld. Commissioner of Wealth Tax (Appeals)

Exemption Claim under Section 2(ea)(i)(3) of the Wealth Tax Act:
The Assessee claimed exemption of assets under section 2(ea)(i)(3) of the Wealth Tax Act, which was not accepted by the Assessing Officer (AO). The AO computed the net wealth of the assets, and the ld. Commissioner of Wealth Tax (Appeals) dismissed the Assessee's appeal. The ld. Commissioner observed that the property in question was not substantiated to be utilized for business purposes. The Assessee failed to prove that the property was used for business or residential purposes, leading to the denial of the exemption claim.

Valuation of Assets under Rule 3 of Schedule III of the Wealth Tax Act:
The AO determined the value of the assets by considering the photographs of the property/assets submitted by the Assessee and the value determined by the Sub-Registrar. The applicability of Rule 3 of Schedule III of the Wealth Tax Act was tested. The ld. Commissioner confirmed the AO's decision, stating that the property was not functionally useful for business or residential purposes. The Assessee's appeal was dismissed as the property did not fall under the category of a house and the land appurtenant to the house.

Claim of Exemption under Section 5(1)(vi) of the Wealth Tax Act:
The Assessee also claimed exemption under section 5(1)(vi) of the Wealth Tax Act, which was not allowed. The ld. Commissioner noted that the structure on the land was in a dilapidated condition and not of any use. The Assessee failed to demonstrate that the structure was used for business purposes or any other meaningful purpose. The ld. Commissioner upheld the AO's decision that section 5(1)(vi) was applicable due to the property's size and condition.

Assessment of the Assets' Value by the Sub-Registrar:
The Sub-Registrar adopted a comprehensive value for both land and structures, which was considered for computing Wealth Tax. The value determined by the Sub-Registrar was used in the assessment of the net wealth of the Assessee's assets. The ld. Commissioner and the Tribunal concurred with this valuation method and found no fault in the determination of the asset's value.

Dismissal of the Assessee's Appeal by the ld. Commissioner of Wealth Tax (Appeals):
The ld. Commissioner dismissed the Assessee's appeal after considering all relevant facts and submissions. It was observed that the Assessee failed to prove the utilization of the property for business or residential purposes, leading to the denial of exemption claims. The decision of the ld. Commissioner was upheld by the Tribunal, stating that the Assessee's case did not fall under the category of a house and the land appurtenant to the house. The Tribunal found no reason to challenge the lower authorities' findings, resulting in the dismissal of the Assessee's appeal.