2020 (2) TMI 540 - AT - Wealth-tax

Wealth tax assessment - exemption of 5(vi) for the purpose of self occupied residential property - HELD THAT - We find that assessee has already exercised the option under Section 5(vi) of W.T. Act in respect of property at Shimla. The option having already been exercised by the assessee in the return; and also the option having not been altered from the assessee s side by way of any revised return to claim the exemption under Section 5(vi) of W.T. Act in respect of Aralias DLF property at Gurgaon; we are of the view that in these facts and circumstances, the contention of the assessee to allow exemption under Section 5(vi) of W.T. Act on account of self occupied property in respect of Aralias DLF property at Gurgaon cannot be permitted at this stage. As both sides have agreed before us at the time of hearing, the Assessee is eligible for deduction on account of loan amounting to the aforesaid ₹ 8,384,306/-. Accordingly, we direct the Assessing Officer to allow deduction to ₹ 8,384,306/- for the purpose of assessing taxable wealth of the assessee. Subject to this direction, the aforesaid enhancement of ₹ 83,62,752/- made by the Ld. Commissioner (Appeals) to taxable wealth, by taking the value of aforesaid Aralias DLF property at Gurgaon at ₹ 1,67,46,763/-is confirmed. Appeal is partly allowed for statistical purposes.

Summary

Issues Involved:
1. Adequacy of opportunity to be heard.
2. Rejection of exemption under Section 5(vi) of the Wealth Tax Act for self-occupied residential property.
3. Enhancement of taxable wealth by the Commissioner (Appeals).
4. Deduction of loan amount taken for property acquisition.

Detailed Analysis:

Adequacy of Opportunity to be Heard:
The assessee contended that they were not afforded enough opportunity to be heard. The appellate tribunal noted that the assessment order was passed ex-parte under Section 16(3) of the Wealth Tax Act, 1957, and the submissions made by the assessee were not considered. This issue was not adjudicated separately as it was deemed general in nature.

Rejection of Exemption under Section 5(vi) of the Wealth Tax Act:
The assessee claimed exemption under Section 5(vi) of the Wealth Tax Act for a property situated in Shimla as self-occupied. During appellate proceedings, the assessee requested to treat the property at Aralias, Gurgaon as exempt instead of the Shimla property. The Commissioner (Appeals) rejected this request, stating there is no provision to change the property for claiming exemption under Section 5(vi) after the Wealth Tax Return has been filed.

The tribunal upheld this decision, noting that the option to claim exemption under Section 5(vi) had already been exercised for the Shimla property in the original return, and no revised return was filed to alter this choice.

Enhancement of Taxable Wealth by the Commissioner (Appeals):
The Commissioner (Appeals) enhanced the taxable wealth of the assessee by ?83,62,752 by valuing the property at Aralias, Gurgaon at ?1,67,46,763. The enhancement was based on the conveyance deed dated 06.03.2009, which showed the sale price of the property at ?1,56,50,991 plus stamp duty of ?10,95,772. The assessee argued that the enhancement was arbitrary and erroneous, as the loan taken for the property should have been considered.

The tribunal confirmed this enhancement but directed the Assessing Officer to allow a deduction for the loan amount of ?8,384,306 taken from Citi Bank for acquiring the Aralias property.

Deduction of Loan Amount Taken for Property Acquisition:
The assessee argued that the loan amount taken for acquiring the Aralias property should be deducted from the taxable wealth. The tribunal agreed with this contention, and both parties concurred during the hearing. The tribunal directed the Assessing Officer to allow this deduction.

Conclusion:
The tribunal partly allowed the appeal for statistical purposes. The enhancement of ?83,62,752 to the taxable wealth by the Commissioner (Appeals) was confirmed, but the Assessing Officer was directed to allow a deduction of ?8,384,306 for the loan taken for the Aralias property. The appeal was thus resolved with partial relief to the assessee.