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TMI Blog2007 (3) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case and in law, the CIT(A) erred in holding that the residential houses belonging to the assessee and allotted to its employees were Assets within the meaning of section 2( ea ) of the Wealth-tax Act, 1957. In any event the Ld. CIT(A) ought to have accepted the contention of the appellant company that residential flats which were vacant on the valuation date should not be subjected to tax on the ground that they were used for the purposes of the business of the appellant company and were thus not assets in terms of section 2( ea )". 3. The Ld. Counsel for the assessee submitted that provision of section 2( ea )( i )(1) of the Wealth-tax Act, 1957 clearly provides that the exemption in the matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to suggest that the director can be singled out for this purpose. 4. We have considered the rival submissions carefully. We reproduce the language of the provision of section 2( ea )( i )(1) of the Wealth-tax Act, 1957 as under : "(1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than five lakh rupees;" A plain reading of this provision of law clearly shows that the condition of gross annual salary of less than five lakh rupees applies equally with reference to an employee or an officer or a director, who is in whole time employment of the assessee-company. There is a "comma" bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the exemption provided in section 2( ea )( i )(1) of the Act for the reason that they are essentially meant to be allotted to the employees. We find that the residential flats vacant as on the valuation dates are essentially meant to be allotted to employees or an officer or a whole time Director, shall be entitled to the exemption provided in the Statute provided the other condition of having a gross annual salary of less than five lakh rupees is satisfied in the case. Merely because a residential house meant exclusively for a residential purpose is laying vacant and is meant for allotment to its employees by the company, it cannot be said that the residential house is not meant exclusively for residential purposes and is not for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Wealth-tax Act shall not be applied to the case of the assessee. He submitted that the combined reading of Second, Third and Fourth provisos to rule 3 of Schedule III of the Wealth-tax Act clearly provides that these provisos pertain to house property exclusively used by the assessee for his residence. He submitted that in the case of corporate assessee, there cannot be any residential user of a property for its own purpose and therefore, these provisos are not applicable to the corporate assessee. The Ld. Departmental Representative has relied on the order of the Assessing Officer and the CIT(A). He submitted that all these properties except Tardeo Walchand Terrace, are liable to be valued at the cost of acquisition in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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