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TMI Blog2013 (2) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal was right in law in exempting the property at No.20, Hunters Road, Madras from the wealth tax, even though Section 40(3)(vi b) of the Finance Act, 1983 states if the property used by 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 business of leasing out the properties. It has leased out two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , since one of the business objects of the assessee is leasing out the properties, a portion of the factory premises 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)(vi b) of the Finance Act, they are entitled to exemption. These objections do 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, insofar as the challenge to the residential house occupied by the Managing Director is concerned, the case of the assessee has been accepted. Insofar as the premises at Door No.123 is concerned, the Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smuch as the Managing Director has got more than one per cent share, the assessee would be entitled to exemption in terms of the above provision. This finding 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 construction 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 question 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that they are doing business in leasing as well 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 Commissioner 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 includable in the net wealth, the assessee is entitled to exemption. This being also a factual finding, it has been confirmed by the Income-tax Appellate 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 tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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