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TMI Blog2013 (10) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed by a single consolidated order for the sake of convenience. 2. We first take up the dispute relating to re-opening of the assessment under section 17 of the Wealth tax Act. The facts in brief are that the assessee for the assessment years 2005-06 and 2006-07 had not filed any return of net wealth under section 14(1) of the Wealth tax Act. The AO noted from the income tax returns that the assessee had received rental income by letting out its business premises i.e. Gala Nos. 501,502,503,510,511 on 5th floor and premises No.14 of Devvratta Building, Sector -17, Vashi, Navi Mumbai to M/s. Fugro Geonics Pvt. Ltd. The AO also noted that the premises let out by the assessee were taxable assets under the provisions of Wealth Tax Act. He, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs had not filed any return of wealth under section 14A(1) of the Wealth Tax Act. It is also not in dispute that the assessee owned certain premises which had been let out on rent. Based on such material, AO had formed the belief that the assessee had taxable assets under section 2(ea) of the Wealth Tax Act. Forming of such belief on the basis of material available in our view is quite reasonable and therefore, re-opening of the assessment can not be considered as illegal. We accordingly uphold the legal validity of re-opening of the assessment and dismiss the ground raised by the assessee for both the years. 3. The second dispute which is also identical in both the years is regarding taxability of business premises owned by the assessee u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso used by the assessee for carrying on of own business but later when the business activities were reduced, these were let out to M/s. Fugro Geonics (I) Pvt. Ltd. It was also submitted that the premises under consideration were covered by exclusion provided in section 2(a)(iv) as premises were in the nature of commercial property. The assessee produced copy of shop establishment certificate in support of the plea and also placed reliance on the decision of the Pune Bench of the Tribunal in the case of Satvider Singh vs. Dy.CWT (109 ITD 241) The AO however did not accept the contentions raised. It was observed by him that the premises under consideration were not occupied by the assessee for the purpose of its business. It was also not a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commercial buildings which are not used by the assessee in its business or profession other than business of letting out of the property are taxable to net worth. In this case, the assessee had let out the premises as part of his business and, therefore, these were exempt from the wealth tax. Reliance was placed on the decision of Hon'ble High Court of Karnataka in the case of CIT, Hubli, JCWT Assessment vs. Shankarnarayana Industries & Plantations (P.) Ltd. (194 Taxman 189) in which it was held that commercial assets used by the assessee in the business of letting out of properties could be treated as an "asset" under Wealth tax Act. The ld. AR pointed out that the object clause of the assessee in MOA included purchases and lease of prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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