1993 (1) TMI 128 - AT - Wealth-tax

Summary

Issues Involved:
1. Exemption of the building from wealth-tax u/s 40 of the Finance Act, 1983.
2. Exclusion of land beneath the old building from valuation.
3. Allowance of liabilities against deposits from tenants.
4. Deduction for appurtenant land and restricted marketability.

Summary:

1. Exemption of the building from wealth-tax u/s 40 of the Finance Act, 1983:
The primary issue was whether the multi-storied building owned by the assessee-company should be exempt from wealth-tax. The assessee contended that the building was used for business purposes and thus should be exempt u/s 40 of the Finance Act, 1983. The Revenue argued that only the part of the building occupied by the assessee itself could be exempt, and the rest, being let out, did not qualify for exemption. The Tribunal held that a commercial asset could be exploited either directly or by letting out, and letting out constituted the business of the assessee. Therefore, the entire property was used in the assessee's business and was exempt from wealth-tax.

2. Exclusion of land beneath the old building from valuation:
The assessee alternatively submitted that the land beneath the old building should be excluded from the valuation as it was inadvertently included as part of the vacant land. The Tribunal found this submission unnecessary to consider, as the property was already deemed exempt from wealth-tax.

3. Allowance of liabilities against deposits from tenants:
The Revenue contended that advances from tenants for the use of lift, generator, and payment of water-tax should not be allowed as liabilities. The Tribunal held that these debts were intricately connected with the assets and should be deducted if the buildings were taxable.

4. Deduction for appurtenant land and restricted marketability:
The Revenue objected to the Commissioner (Appeals) granting deductions for appurtenant land and restricted marketability due to lack of vacant possession. The Tribunal upheld the Commissioner (Appeals)'s decision, which followed the Madras High Court's ruling in Raja D. V. Seetharamayya Bahadur v. CGT [1988] 173 ITR 366.

Conclusion:
The appeals of the assessee were allowed, and the appeals of the Revenue were dismissed. The property was deemed exempt from wealth-tax, and the Tribunal found no reason to interfere with the Commissioner (Appeals)'s view on the deductions.