9911796707
TMI Blog2008 (4) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer ought to have held that the residential flat at NCPA Apartment is not chargeable to wealth tax. 3. The ld. CIT(A) erred in confirming the value assessed by Assessing Officer at Rs. 3,01,12,105 for NCPA apartment as asset chargeable to wealth-tax." 2. The ld. Counsel for the assessee submitted that the main dispute in this case was regarding the addition of Rs. 3.01 crore on account of value of NCPA flat at Nariman point, Mumbai. He submitted that the flat in question was used for business purpose of the assessee in all the preceding assessment years and, therefore, did not fall in the definition of "assets" as given in section 2(ea) of the Wealth-tax Act, 1957. The Assessing Officer has not charged the value of this flat u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ALV of the flat has been assessed for a period of 11 months by the Assessing Officer in the Income- tax assessment of the assessee for the relevant assessment year. Learned Counsel for the assessee relied on the decision of Mumbai Tribunal in Hindustan Construction Co. Ltd. v. Dy. CIT [2007] 14 SOT 450 and of Hon'ble Madhya Pradesh High Court in Smt. Shashi Varma v. CIT [1997] 224 ITR 106. 3. Ld. DR on the other hand has relied on the order of Assessing Officer and the CIT(A). He submitted that the provision of section 2(ea) of the Wealth-tax Act was very clear on the issue. Since the flat in question was admittedly not let out for a minimum period of 300 days in the previous year, the assessee is not entitled to exemption thereon. 4. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax is levied by taking into account the income/loss of the assessee for the whole of the previous year whereas the wealth-tax is levied with reference to the net wealth of the assessee on the "valuation date". According to section 3 of the Wealth-tax Act, 1957, wealth tax is chargeable in respect of the wealth on the corresponding valuation date of every individual, HUF and company at the rate specified therein. Thus, the wealth tax is chargeable on the net wealth of the assessee which exists as on the relevant valuation date and not on the basis of the net wealth of the assessee for the whole of the previous year. 6. After first day of April, 1993, i.e., from the assessment year 1993-94 onwards, the word "assets" has been defined in provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earlier and subsequent years is no ground to hold that it is not chargeable to tax during the relevant year also. The ALV assessed for the 11 months by the Assessing Officer in income-tax assessment for the relevant assessment year of the assessee is not relevant for deciding the chargeability or otherwise of the flat in the wealth tax assessment of the assessee. The argument of the learned Counsel for the assessee that the flat in question is not chargeable to tax as assessee has occupied the same for business purpose during the part of the year and for the rest of the year was given on rent, is not sustainable in law. An asset falling under the definition of word "assets" under section 2(ea) of the Act is chargeable to tax, unless the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndition provided in one exemption. In order to claim the benefit of any exemption provided by the Legislature from levy of wealth tax on a particular asset, the assessee has to fulfil all the conditions provided in the exemption clause of the relevant provision of law as on the valuation date. In this case, the flat in question was not occupied by the assessee for the purpose of his business or profession as on the valuation date and hence, the assessee cannot claim the benefit of exemption under section 2(ea)(i )(3). In order to claim the benefit of exemption under section 2(ea)(i )(4), the assessee must show that (i) the residential property was let out as on the valuation date and (ii) the residential property was to let out for a minimu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. Ld. DR has no objection, if the issue is set aside to the file of the Assessing Officer for verification. In these facts of the case, we set aside the issue of value of motor cars addable in the net wealth of the assessee to the file of the Assessing Officer with direction to decide the issue in accordance with law after allowing due opportunity of hearing to the assessee on this issue and after verifying the value of motor cars from the records. We direct accordingly and the ground of appeal No. 1 of the assessee is accordingly disposed off.
10. In the result, the appeal of the assessee is partly allowed for statistical purposes.
-------------------------
*In favour of revenue. X X X X Extracts X X X X X X X X Extracts X X X X
|
