9911796707
TMI Blog2005 (5) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is a sick industrial company and the company made a reference to Board of Industrial Financial Reconstruction (in short BIFR) under section 15 of the Sick Industrial Companies (Special Provisions) Act in May, 1993. It seems that properties were pledged with financial institutions and banks and some restrictions were imposed by the BIFR for alienation of the properties. These properties consisted of factory buildings and vacant land appurtenant thereto, guest houses with land appurtenant thereto and vacant lands. 4. According to the ld. AR, number of schemes were sanctioned by BIFR from time to time to rehabilitate the company and under such schemes directions were given to the promoters to bring further investments, which promoters failed to bring. In this background, the company ultimately made a proposal to sell some of its immovable properties and bring monies to rehabilitate the company. Such proposal was initially rejected by the BIFR by its order dated 24-2-2003 against which an appeal was filed before the appellate authority, which also confirmed the rejection. Further appeal was filed before the Hon'ble Madras High Court and Hon'ble High Court directed the Industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich construction of a building is not permissible under any law for the time being in force in the area in which such land is situated. He further submitted that according to sections 48 and 49 of The Tamil Nadu Town & Country Planning Act, 1971 wherein it specifically provided that no person other than any State Government or Central Government will erect any building except with the written permission of the appropriate planning authority and in accordance with the conditions. He admitted that some of the lands had already been converted into stock-in-trade and no such permission has been granted by the appropriate authority under the Act. He pointed out that in the Tamil Nadu Town & Country Planning Act, 1971, in sections 48 and 49, the term used is "permissible" and not the term "prohibited", which means that such lands cannot be subjected to wealth-tax unless permission has been given by the authorities because permissible would mean that permission is a prerequisite and prohibition would refer to total ban on construction, e.g., in Coastal Regulation Zone. Other detailed submissions were also made in respect of individual properties, which we shall discuss separately while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lands into stock-in-trade. Perhaps, this step was taken to save income-tax on capital gains because appreciation in the stock-in-trade on account of properties has been adjusted against the normal business losses. But it also shows that assessee was having clear intention to save such lands and such intention can be found only if there were surplus vacant lands. He submitted that though there is a provision for exemption of stock-in-trade, but this limit was originally fixed at 3 years from the date of acquisition by the Finance Act, 1993 and the limit of 3 years was extended to 5 years by the Finance Act, 1994, w.e.f. 1-4-1995 and it was further extended to 10 years by Finance (No. 2) Act, 1998, w.e.f. 1-4-1999; which means that for the assessment year 1993-94, the limit was only three years and upto assessment year 1998-99 the limit was 5 years. At this juncture, a specific query was posed by the Bench that why lands were converted into stock-in-trade and the ld. counsel of the assessee admitted that the conversion was done with a view to sell these lands, because assessee company was suffering business losses. 7. After considering the rival submissions carefully, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed after taking appropriate permission. In that sense, there was no prohibition on construction and it was very much permissible. Had the assessee sought permission, same would have been given as per guidelines of Local Authorities and thus construction was very much possible. Clause (b) of section 2(ea) to the Wealth-tax Act defines "urban land" and excludes only those lands where construction of a building is not permissible under any law and the provisions of the Tamil Nadu Town and Country Planning Act, 1971, relied on by the ld. AR are not of much help because, construction is very much permissible. There may be some controversy in respect of whether such lands can be called as urban lands or not, when some buildings have been constructed on a small plot of land. E.g., in case of Rother House, Bangalore, constructed area is only 611 sq.ft. whereas the plot area is 79,280 sq.ft. Similarly, in case of Boat Club Road, Chennai, the constructed area is only 3,369 sq.ft. whereas the total area of the plot is 63,168 sq.ft. Now let us examine rule 6 and rule 8 of Schedule III to Wealth-tax Act, 1957, which reads as under:- "6. Adjustments to value arrived at under rule 3, for u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case, the Assessing Officer, with the previous approval of the Deputy Commissioner, is of opinion that it is not practicable to apply the provisions of the said rule to such a case; or (b) where the difference between the unbuilt area and the specified area exceeds twenty per cent of the aggregate area; or (c) where the property is constructed on leasehold land and the lease expires within a period not exceeding fifteen years from the relevant valuation date and the deed of lease does not give an option to the lessee for the renewal of the lease, and in any case referred to in clause (a) or clause (b) or clause (c), the value of the property shall be determined in the manner laid down in rule 20." 8. As has been pointed out by the ld. DR, in most of the cases, difference between the unbuilt area and specified area exceeds 20 per cent and therefore such properties have to be valued on the basis of rule 20 as prescribed under rule 8. Rule 20 reads as under:- "20. Valuation of assets in other cases.- (1) The value of any asset, other than cash, being an asset which is not covered by rules 3 to 19, for the purposes of this Act, shall be estimated to be the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso find that in the later years some of these lands have actually been sold without selling a particular building and/or along with buildings. In these circumstances, such lands have to be held as surplus urban vacant lands. 11. As far as individual properties are concerned, we shall discuss the same in detail while dealing with the each property individually. (ii) Whether deduction of debt claimed is permissible under the provisions of the Wealth-tax Act?" 12. The ld. AR submitted that assessee company has lot of liabilities and such debts are secured by way of equitable mortgage of immovable properties and therefore same should have been allowed to be deducted as liability. 13. On the other hand, the ld. DR submitted that properties owned by the assessee have been brought to charge of wealth-tax after assessment year 1993-94 and section 2(m) of the Wealth-tax Act also stood amended w.e.f. 1-4-1993 and it clearly lays down that only those assets can be deducted, which have been incurred in relation to the said assets. The properties owned by the assessee have been acquired for a very long period and in most of the cases, even prior to 1957, when Wealth-tax Act was introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (iii), clause (iiia) or clause (iiib) of section 27 of the Income-tax Act shall be includible in the net wealth of the person who is deemed under the said clause to be the owner of that building or part thereof. Explanation 2: Where a debt falling under sub-clause (ii) is secured on, or has been incurred in relation to, any asset which is not to be included wholly or partly in the net wealth by virtue of the provisions of sub-section (1A) of section 5, the amount of such debt shall, for the purposes of the said sub-clause, be limited to the value of the said asset which is not includible in the net wealth under sub-section (1A) of section 5." 16. A plain reading of the section makes it clear that net wealth has been defined in the section and the same means amount by which aggregate value of all the assets belonging to the assessee on the valuation date is in excess of value of all the debts owed by the assessee which have been incurred in relation to the said assets. This clearly shows that only those debts can be deducted which have been incurred in relation to the assets, which are included in the said assets. The phrase "in relation to" would clearly indicate that if the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was Rs. 550 per sq.ft. and in this respect he referred to the guidelines issued by the Sub-Registrar Office Website. Therefore, property was sold at 37.28 per cent of the guideline value and thus same value may be adopted for valuation of various properties. 18. On the other hand, the ld. DR while supporting the order of the Assessing Officer, where he has relied on the decision of Hon'ble Supreme Court in case of Purshottam N. Amarsay v. CWT [1973] 88 ITR 417 and Ahmed G.H. Ariff v. CWT [1970] 76 ITR 471, where it was held that when section 3 imposed a charge on wealth-tax under the net wealth, it necessarily includes in its ambit property of every description. He submitted that it is not necessary that property should be actually sold in the market, but only a hypothetical situation has to be contemplated, where it should be assumed that there existed open market for sale of such an asset. He referred to various clauses of BIFR order and submitted no restriction as such was imposed on the sale of properties. Only certain procedures were prescribed and such sale could be conducted by a sale committee, which comprised the nominees of State Government of Tamil Nadu and Karnataka, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engineering Division and Process House into two separate companies, viz., Binny Engineering Works Limited and Binny Processors Limited, modernization of the Textile Division with labour rationalisation, development and sale of real estate properties besides one-time settlement of dues of the banks and limitations with the association of new promoters (M/s. Dynamix Group). (2) To vacate the charge on the non-factory lands and buildings, held in fixed assets/stock-in-trade by the company proposed to be developed by its Real Estate Division, in a scheduled manner and in proportion to the amount received to enable the company to develop the property, enter into sale agreement with the prospective customer which would be possible only when the title is clear. (3) To constitute an asset sale committee comprising nominees of State Government of Tamil Nadu and Karnataka, nominees of IDBI and SBI, two representatives of Management and Special Director appointed by the BIFR to monitor sale of real estate properties and utilisation of sale proceeds". Therefore, the clauses clearly show that no restrictions on sale of property were imposed by the BIFR, rather the order envisages restructuri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ink the same should be dealt while adjudicating appeals for various years and now therefore, we take up adjudication of appeals for various years. WTA 35/2000 assessment year 1993-94 (assessee's appeal) 23. In this appeal, assessee has raised the following grounds:- "1(a) The Commissioner of Income-tax (Appeals) erred in confirming that the guest houses are includible in the net wealth. (b) The Appellant submits that guest houses being in the nature of transit houses are business assets and were therefore not includible in the net wealth. (c) The Commissioner of Income-tax (Appeals) erred in not considering the alternate ground of the appellant that the transit houses would fall within the scope of rule 3 of Schedule III to the Wealth-tax Act." 24. The brief facts of the case are that the assessee owned four guest houses known as Boat Club Area Guest House, Chiddingstone House, Rother House and Strathern House. Out of these, the Assessing Officer assessed the valuation of the Chiddingstone Guest House as per rule 3, whereas it was held in case of other guest houses that valuation has to be done as per rule 20 to Schedule III. It was so because the Assessing Officer recorded a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds 20 per cent, then property cannot be valued as per rule 3 to Schedule III. As Assessing Officer has already recorded the findings that difference between unbuilt area and specified area exceeds 20 per cent of the aggregate area, the same has to be valued as per rule 20. In these circumstances, we find nothing wrong with the order of the ld. CWT (Appeals) and confirm the same. 27. In the result, the appeal is dismissed. WTA 47/2000 assessment year 1993-94 (Department's appeal) 28. In this appeal, the Revenue has raised the following effective grounds:- (1) The CIT(A) has erred in holding that the market value of the properties (Guest House) owned by the assessee company has been diminishing in view of the fact that the assessee company is sick and is before BIFR. (2) The CIT(A) erred in allowing disproportionate debts claimed by the assessee company. (3) The CIT(A) erred in admitting fresh evidence which was not produced before the Assessing Officer regarding vacant land in Magadi Road being leased out to Hindustan Petroleum Corporation Ltd. (4) The CIT(A) has erred in directing the Assessing Officer to exclude the value of urban land claimed to be stock-in-trade from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated at Magadi Road as vacant land, which was though given on rent, but the same was shown as vacant land. The value was adopted on the basis of adjacent land of the assessee at Rs. 58,88,839. The CWT (Appeals) adopted the value at Rs. 1 lakh as this land was given on rent by the assessee to Hindustan Petroleum Corporation Ltd., a Government organization, on a lease rent of Rs. 1,000 per month and the lessee had already put up a building on the above property. 32. The ld. AR submitted that vacant plot was leased out to Hindustan Petroleum Corporation Ltd., who have erected a building and, therefore, same is to be valued as per Schedule III. 33. On the other hand, the ld. DR submitted that even if it is considered as let out property, even then the value was not adopted at the appropriate figure, because municipal taxes itself was Rs. 3,930 per year and thus it is not possible that the property was let out at Rs. 1,000 per month. 34. After considering the rival submissions, we find that the application of Schedule III has been held to be mandatory and even on retrospective basis by the Hon'ble Supreme Court in the case of Bharat Hari Singhania v. CWT [1994] 207 ITR 1. Once the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat once the lands are converted into stock-in-trade and it was further admitted before us that the intention was to sell these properties, then the same has to be held as vacant surplus land. May be, the properties were converted into stock-in-trade to save capital gain tax liability. But then, similar treatment has to given under both the Acts, and assessee cannot blow hot and cold at the same time. That is, when in income-tax proceedings properties have been considered to be stock-in-trade, then these cannot be considered as factory premises while deciding the wealth-tax issues. In any case, no claim that such properties were used for dumping the coal, ash, etc. were raised before the Assessing Officer and no new claim on the facts can be made before us for the first time. As far as exclusion clause is concerned, "urban land" is defined in section 2(ea) clause (b) as under:- "(b) "urban land" means land situate- (i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of wealth-tax under the head 'surplus lands' on the basis of valuation by the registered valuers filed by the assessee during income-tax proceedings, 40. The CWT (Appeals) deleted this addition after observing that the school requires play grounds, the club requires open space for conducting its activities, the residential colony requires space for market, park and pen area of common utility to accommodate gathering in social functions like marriages etc. 41. Before us, various contentions were raised which have already been considered while discussing the principal issues. After considering such contentions and decision taken by us while adjudicating the principal issues, we find that the Buckingham Gardens, property and the Carnatic Gardens property at Chennai were converted into stock-in-trade in financial year 1981-82 and it was admitted before us that the intention of the assessee was to sell the same. Similarly, the Joint School Compound property, Binnyfields property and Binnystone Gardens property was also converted into stock-in-trade in the financial year 1981-82 and it was admitted that the intention was to sell the same. Once the assessee has the intention of selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derhalli property (d) Hosakere property (e) Nandidurgh property. (ii) He should have found that these assets being used for business purpose were not assessable to wealth." 47. Grounds No. (1) & (3) have been decided while adjudicating the appeals of the assessee and Revenue for the assessment year 1993-94 in the above noted paragraphs and following that order, we decide these issues against the assessee. 48. Ground No. (2): In respect of Rother, Chiddingstone and Strathern guesthouses, the only objection taken before us was that the same had already been transferred and therefore the same cannot be included in the net wealth of the assessee. 49. In the written submissions at page 8, it has been pointed out that these properties were converted into stock-in-trade in the financial year 1981-82 and later on these properties were demolished pursuant to a joint development agreement on 21-3-1995 with HMG Engineering Pvt. Ltd. from whom Rs. 6 crores was received as consideration for granting them the right to develop these properties and to take 50 per cent of the net profit on the sale of the developed property. From these submissions, it becomes clear that the properties were ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 7 times the dimension of the constructed area cannot by any stretch of imagination be regarded as appurtenant land. 2.4 The learned CIT(A) has failed to appreciate that under normal circumstances only such part of land which are required for the beneficial enjoyment of the building with minimum basic needs can alone be regarded as appurtenant land. 2.5 The learned CIT(A) has failed to appreciate that the direction to allow 16.79 grounds as appurtenant land when compared to the size and building is luxuriant and has no sanction under the law." 56. The brief facts regarding this issue are that the assessee was the owner of the property called Vrindavan measuring 18.79 grounds. Since the property was sold to India Cement Ltd. during assessment year 1996-97 for Rs. 16,30,64,000 hence Assessing Officer concluded the same remained with the assessee on valuation dated 31-3-1994 and 31-3-1995. After-allowing 10 per cent discount, value of the same was taken at Rs. 14,67,57,000 and Rs. 13,20,81,000 for assessment years 1995-96 and 1994-95 respectively. 57. The CWT (Appeals) noted that this property basically consisted of 26.29 grounds and built up area was only 5,550 sq. ft. Out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding, which has been treated as fixed assets by the assessee-company and thus exempt under section 2(ea) as business assets. However, as far as 2 grounds which were converted into stock-in-trade by the assessee company in 1982 is concerned, the same has been rightly included in the net wealth by the ld. CWT (Appeals) and we confirm the same, following our observations made while discussing the principal issues. Here it is pertinent to note that the ld. CWT (Appeals) has adopted the sale value of this land, which was made in the assessment year 1996-97. Therefore, even if rule 20 is applied, it will lead only to determination of market value which has already been done by him. In these circumstances, we find nothing wrong with the order of the ld. CWT (Appeals) and confirm the same. 60. In the result, the appeal is dismissed. WTA 50/Mds/2000 assessment year 1995-96 (Assessee's appeal) 61. In this appeal, assessee has raised the following grounds:- "(1)(a) The Commissioner of Income-Tax (Appeals) erred in holding that the guest houses were assessable to wealth tax. (b) He should have found that these assets were transit houses and being used for purpose of business was not asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax (Appeals) erred in conforming the inclusion of the following properties held as 'stock-in-trade' at the estimated market value in the computation of net wealth: (i) Ash well Maidan, Chennai (ii) Boat Club Road, Chennai. (b) The Appellant submits that the valuation of the properties, which were encumbered, cannot be taken at the estimated market value. (2)(a) The Commissioner of Income-tax (Appeals) erred in confirming the inclusion of the following properties at the estimated market value in the computation of net wealth: (i) Buckingham Garden (ii) Carnatik Garden (iii) Joint School Compound (iv) Binny Fields (v) Binny Stone Garden. (b) The Appellant submits that the assets having been used for industrial purpose does not lose its character merely because it has been considered as stock-in-trade in the books. (3) The Commissioner of Income-tax (Appeals) erred in confirming the inclusion of a portion of the Varindavan Property in the net wealth at the estimated market value of Rs. 1,52,70,879." 68. Ground Nos. 1 & 2- After hearing both the parties, we find that these issues have already been decided by us against the assessee while adjudicating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. (ii) He should have found that these assets being used for business purpose were not assessable to wealth." 74. Ground Nos. (1) & (3) have been decided while adjudicating the appeals of the assessee and Revenue for the assessment year 1993-94 in the above noted paragraphs and following that order, we decide these issues against the assessee. 75. Ground No. (2)- In respect of Rother, Chiddingstone and Strathern guesthouses, we have discussed in detail in the above noted paragraphs in Assessee's appeal for 1994-95 and have confirmed the order of the ld. CWT (Appeals). Following that decision, the order of the CWT (Appeals) is confirmed and the issue is decided against the assessee. 76. In the result, the appeal is dismissed. WTA 66/Mds/2000 assessment year 1996-97 (Revenue's appeal) 77. In this appeal, the Revenue has raised the only effective ground as under:- "The CIT(A) has erred in admitting fresh evidence which was not produced before the Assessing Officer regarding vacant land at Magadi Road being leased out to Hindustan Petroleum Ltd." 78. This issue has been decided by us while adjudicating WTA No. 47/2000 for assessment year 1993-94, wherein the matter was set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty, because no Sale Deed has been executed. Therefore, a sum of Rs. 13,34,85,000 was added to the net wealth on account of this property. 85. The ld. CWT (Appeals) observed that assessee had already entered into Moll with Somdutt Builders because assessee has already received the consideration. 86. After hearing both the parties, we find it is not clear from the records whether assessee was also to share some amount of property after development because copy of MoUs etc. was not filed. However, we think that the amount raised from Somdutt Builders has to be treated as a liability deductible against this property, if the value of this property is included in the net wealth of the assessee. In this background, we set aside this issue to the file of the Assessing Officer for re-examination of the issue, after going through the details of agreement entered into with Somdutt Builders and decide the issue in the light of the observations made by us. 87. In the result, the appeal is allowed for statistical purposes. WTA 19/Mds/2001 A.Y. 1997-98 (Assessee's appeal) 88. In this appeal, assessee has raised the following grounds:- "1(a) The Commissioner of Income Tax (Appeals) erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngalore Bench of the Tribunal in case of Sree Suryodhaya Industries Ltd. v. DCWT [1997] 63 ITD 287 (Bang.). In respect of Vysarpadi property, it was submitted that same was used for paring of the vehicles of employees and therefore same should be treated as business assets. 92. After considering the rival submissions, we find that though in grounds of appeal and in the orders of the lower authorities, these lands have been considered as vacant surplus lands not converted into stock-in-trade, but in the written submissions by the ld. counsel of assessee at pages 6 & 7, it has been submitted that these lands have been converted into stock-in-trade. However, even if it is assumed that these lands were not converted into stock-in-trade, even then they have been rightly charged to tax by the lower authorities because no claim was made before the Assessing Officer that land was appurtenant to factory premises or canteen premises and was being used for the purpose like parking of the vehicles. It is settled position of law that no fresh claim can be made before the Tribunal for the first time on facts of the case. Since this is a new claim being made for the first time, even decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion of the property at Ashwell Maidan, Chennai, held as 'stock-in-trade' at the estimated market value in the computation of net wealth. (b) The appellant submits that the valuation of the properties, which was encumbered, cannot be taken at the estimated market value. 2.(a) The Commissioner of Income-tax (Appeals) erred in confirming, the inclusion of the following properties at the estimated market value in the computation of net wealth: (i) Buckingham Garden (ii) Carnatik Garden (iii) Joint School Compound (iv) Binny Fields (v) Binny Stone Garden. (b) The appellant submits that the assets having been used for industrial purpose does not lose its character merely because it has been considered as stock-in-trade in the books. 3. The Commissioner of Income-tax (Appeals) erred in ignoring the debts secured on the assets of the company in computing their value for wealth tax purpose." 99. These issues have been decided while adjudicating the appeals of the assessee and Revenue for the assessment year 1993-94 in the above noted paragraphs and following that order, we decide these issues against the assessee. 100. In the result, the appeal is dismissed. WTA 53/Mds/2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving them the right to develop these properties and to take 50% of the net property on the sale of developed properties. He observed that matter was under dispute therefore Assessing Officer should again fix the value of the such properties. However, he directed the Assessing Officer to adopt a sum of Rs. 6 crores received from HMG Engg. Pvt. Ltd. as debt. 108. Before us, the ld. DR referred to the agreement entered into with HMG Engineering Pvt. Ltd. and carried us through various clauses and emphasized that assessee had received sum of Rs. 6 crores not towards sale consideration, but in consideration paid for entering into joint development with the assessee. In these circumstances, a sum of Rs. 6 crores cannot be called a debt and cannot be reduced from the value of the property. 109. On the other hand, the ld. AR supported the order of the CWT (Appeals). 110. After considering the rival submissions, we find that clause 15 of the development agreement with HMG Engg. Pvt. Ltd. reads as under:- "15. It is repeated for the sake of clarity that the relationship between the parties hereto is as Co-Developer of the said property belonging to the party of the First Part and the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et value for valuation of the abovementioned properties. (d) The Commissioner of Income-tax (Appeals) erred in confirming that the value of these assets should be made, without reducing the value of debts. (e) He should have found that there was an embargo on the sale of the property and adopting market value based on hypothetical sale was not justified. 2.A(a) The Commissioner of Income-tax (Appeals) erred in confirming the valuation of the Assessing Officer at the estimated market value in respect of the following properties: (i) Property at Vyasarpadi, Chennai (ii) Property at Cooks Road, Chennai (iii) Tank Bund Road property, Bangalore (b) He should have found that the value shown in the return was proper. (c) He should also have found that the property at Cooks Road was subject to acquisition by the Tamil Nadu Government. B.(a) The Commissioner of Income-tax (Appeals) erred in valuing of the property at Magadi Road, Bangalore at Rs. 1,00,000. (b) He should have found that there was an embargo on the sale of the property and the value shown in the return was proper. 3.(a) The Commissioner of Income-tax (Appeals) erred in confirming the valuation of the following prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals of the assessee and Revenue for the assessment year 1993-94 in the above noted paragraphs and following that order, we decide these issues against the assessee. 117. Ground Nos. (4) & (5): These issues have been decided while adjudicating the appeals of the assessee and Revenue for the assessment year 1993-94 in the above noted paragraphs and following that order, we decide these issues against the assessee. 118. In the result, the appeal is partly allowed. WTA 55/Mds/2003 A.Y. 1999-2000 (Revenue's appeal) 119. In this appeal, Revenue has raised the following effective grounds:- 1. The learned CIT(A) has erred in deleting the addition made in the WT Asst. with regard to the vacant land at Boat Club Road, Chennai amounting to Rs. 13,34,85,000. 2. The learned CIT(A) has erred in directing to allow Rs. 6 crore received by the assessee from M/s. HMG Engineering (P.) Ltd. for development of property at Strathern House, Rother House and Chiddingstone House, Bangalore from the value of the property as a liability. 3. The learned CIT(A) has erred in directing to adopt the value of the Magadi Road property at Rs. 1 lakh. 120. Ground No. (1): As decided in assessment years 1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew of definition of section 2(17) of the Income-tax Act. (c) Even though the charging section 3 of the Wealth-tax Act speaks about the inclusion of company for the purpose of Wealth-tax, tilt-definition of section 2(m) specifically omits company from charge of Wealth-tax. The definition under section 2(m) mentions "assets required to be included in his net wealth" and hence it speaks about charging assets only of individuals and HUF and not companies. 2. Without prejudice to the above claim that the company is not assessable to wealth-tax, the appellant submits:- (a) The Commissioner of Wealth-tax, Appeals erred in assessing Waterside Area Transit House at Chennai at an estimated market value of Rs. 31,84,03,856, while the asset falls outside the ambit of Wealth-tax Act. (b) The Commissioner of Wealth-tax, Appeals erred in assessing Boat Club Road, vacant land at Chennai at an estimated market value of Rs. 17,62,02,000 while the asset falls outside the ambit of Wealth-tax Act. (c) In any event, the Commissioner of Wealth-tax Appeals should have found that there was an embargo on the sale of the property and adopting market value based on hypothetical sale was not justified. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the debts secured on the assets of the company in computing their value for wealth tax purpose." 128. Ground No. (1): The ld. AR reiterated the grounds of appeal. On the other hand, the ld. DR submitted that it is clear from the provisions of the Wealth-tax Act that the assesses company is assessable to wealth-tax and therefore grounds raised by the assessee are totally misplaced and misconceived. 129. After considering the rival submissions, we find that the ld. CWT (Appeals) has decided this issue vide para 4.1, which is reproduced as under:- "4.1 I have carefully considered the issue. As regards to the argument of the appellant that it is not exigible for wealth tax, it may be stated that section 2(h) of the Wealth-tax Act says that the word "company" shall have the meaning assigned to it in clause (17) of section 2 of the Income-tax Act and as per section 2(17) of the Income-tax Act, "company" means,- (i) any Indian company, or (ii) any body corporate incorporated by or under the laws of a country outside India, or (iii) any institution, association or body which is or was assessable or was assessed as a company for any assessment year under the Indian Income-tax Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese circumstances, we find nothing wrong with the order of the ld. CWT (Appeals) and confirm the same. 131. Ground Nos. (2) to (7): These issues are discussed by us while adjudicating the principal issues as well as the grounds raised in various appeals and all these issues have been rejected by us in the above noted paragraphs and following the same, we reject these grounds. 132. In the result, the appeal is dismissed. WTA 137/Mds/2004 A.Y. 2000-01 (Revenue's appeal) 133. In this appeal, Revenue has raised the following grounds:- "2.1 The Learned CIT(A) has erred in withdrawing enhancement proposal with regard to the vacant land at Boat Club Road, Chennai for the assessment year 2000-01. 2.2 The Learned CIT(A) has failed to appreciate that the agreement with M/s. Somdutt Builders was only for half of the property and the assessee had ownership of the balance of 50 per cent of the property on the valuation date. 2.3 The Learned CIT(A) has failed to appreciate that when the assessee was endowed with the ownership of 50 per cent of the vacant land at Boat Club Road, Chennai on the valuation date, he ought to have sustained 50 per cent of the valuation made by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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