9911796707
TMI Blog2012 (4) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1983, states if the pro- perty used by the director, manager and secretary as residential accommodation then it will not be exempt and the same will be included as taxable asset in the net wealth of the assessee ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the value of the property at door Nos. 123 and 124 should not be included in the assessee's net wealth is valid ?" 2. The assessee, apart from doing printing business, is also doing the busi- ness of leasing out the properties. It has leased out two properties at Door Nos. 123 and 124, Brick Kiln Road, Madras-7. The first property was leased out to the Tamilnadu Electricity Board and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was leased out to M/s. Lotus Inks, which also carries on the manufacture of inks and, therefore, in terms of the section 40(3)(vib) of the Finance Act, they are entitled to exemption. These objections did not find favour with the Assessing Officer, who ultimately finalised the assessment, determining tax after rejecting the claim for exemption. 3. When the matter was taken on appeal to the Commissioner of Income- tax, in so far as the challenge to the residential house occupied by the managing director is concerned, the case of the assessee has been accepted. In so far as the premises at Door No. 123 is concerned, the Com- missioner of Income-tax (Appeals) found that inasmuch as the nature of the premises had not been discussed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the assessee would be entitled to exemption in terms of the above provision. This find- ing has been accepted by the Income-tax Appellate Tribunal. However, in our opinion, the reasoning of the Commissioner of Income-tax (Appeals) as well as the Tribunal in favour of the assessee is not on proper con- struction of the above provision. Nevertheless, the assessee would be entitled to exemption for our own reasons, which we are inclined to deal with. A careful reading of the above provision would show that the ques- tion of holding more than one per cent. of equity share for claiming the benefit would arise only in case of an employee of the assessee and not the director, manager or the secretary, as the case may be. The section is very cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the course of such business, they have leased out the premises to M/s. Lotus Inks, a factory manufacturing inks. This being the factual position, the Com- missioner of Income-tax (Appeals) had referred to the said fact holding that the leasing out the premises owned by a company is part of the company's business and, therefore, the asset itself having been commercially exploited, is not includible in the net wealth, the assessee is entitled to exemption. This being also a factual finding, it has been confirmed by the Income-tax Appel- late Tribunal. We do not find any justification to interfere with that. That apart, the substantial question of law No. 2, though raised in respect of those two premises, in our reason, the said questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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