2015 (10) TMI 799 - AT - Wealth-tax

Addition on account of Flat at Goa to the net wealth of the assessee - CIT(A) deleted the addition - Held that - It is undisputed that the assessee owned only one flat at Goa which was a residential property. Section 5(1)(vi) of Wealth Tax Act provides an exemption to one house or a part of a house or a plot of land under the section for an individual or HUF. In the given facts and circumstances the assessee deserves for this exemption. The Revenue has failed to bring any contrary facts on the grounds.Keeping all these facts in view, we find no infirmity in the order of the CWT(A). - Decided against revenue. Addition of various outstanding balances shown with various parties - CIT(A) deleted the addition - Held that - After hearing we hold that these balances were in the nature of commercial transactions which are not taxable under the Wealth Tax Act, 1957. It is also pertaining to note that such outstanding balances were never brought for the taxation under W.T. Act by the Assessing Officer either in preceding or in any succeeding years. Therefore, on account of rule of consistency also, assessee deserves for relief, which has been rightly granted by the CWT(A). Considering all these aspects, we find no fault in the order of the CWT(A). - Decided against revenue. Addition of ₹ 60 lacs made by the Assessing Officer on account of factory Land at Namoli, Surajpur of ₹ 50 lacs and factory land and building at Namoli, Surajpur of ₹ 10 lacs - Held that - Estimating value of the asset AO has not taken help of any valuation report. Further valuation is necessary to arrive at the correct value of the assets. AO has not done so. In view of these facts, we remand the issue back to the file of Assessing Officer. - Decided in favour of assessee for statistical purposes.

Summary

Issues Involved:
1. Revenue's appeal: Addition of Flat at Goa and outstanding balances.
2. Assessee's appeal: Addition of factory Land at Namoli, Surajpur and factory land and building at Namoli, Surajpur.

Revenue's Appeal - Addition of Flat at Goa:
The Revenue challenged the deletion of the addition of Rs. 50 lacs to the assessee's wealth on account of a Flat at Goa. The AO denied exemption under section 5(1)(vi) of the Wealth Tax Act, arguing lack of proof of residential usage. The ITAT observed that the assessee owned only one flat in Goa, qualifying for the exemption under the Act. The Revenue failed to provide contrary evidence, leading to the dismissal of this ground.

Revenue's Appeal - Addition of Outstanding Balances:
The Revenue contested the deletion of outstanding balances totaling Rs. 80,89,909. The ITAT ruled that these were commercial transactions not taxable under the Wealth Tax Act. Moreover, the balances were consistent across assessments, warranting relief for the assessee. As a result, this ground of appeal was dismissed.

Assessee's Appeal - Addition of Factory Land at Namoli, Surajpur:
The assessee challenged the addition of Rs. 60 lacs for factory Land at Namoli, Surajpur and factory land and building at Namoli, Surajpur. The assessee argued that these were business assets temporarily suspended, thus not taxable. Additionally, pending litigation and exclusion provisions under the Act were cited. The ITAT found the AO's valuation arbitrary and lacking expert input, remanding the issue for proper assessment.

Conclusion:
The ITAT upheld the exemption for the Flat at Goa and outstanding balances, dismissing the Revenue's appeal. In the assessee's appeal, the addition of factory Land at Namoli, Surajpur was remanded for a fair valuation process. The appeals were decided accordingly, with the Revenue's appeal dismissed and the assessee's appeal allowed for statistical purposes.