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TMI Blog2016 (5) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... the cars were utilized in the business to complement the revenue generation. The legislature intends to exclude these assets, as they are productive. In the given situation, the cars are productive, hence, these cars have to be excluded from the definition of assets as specified exclusion. In view of the above discussion and interpretation, the cars used in the business are considered as productive and should be treated similar to ‘plant and machinery’. In our view, these cars are not assets u/s 2(ea)(ii) of the Wealth Tax Act. Accordingly, we direct the AO to exclude these cars from the list of assets for wealth tax purpose. - WTA Nos. 9 & 10/Hyd/2016 and 43/Hyd/2015 - - - Dated:- 27-4-2016 - Shri D. Manmohan, Vice President And Shri S. Rifaur Rahman, Accountant Member For the Petitioner : Shri Siddharth Toshnival For the Respondent : Shri M. Sitaram ORDER Per S. Rifaur Rahman, A. M. These appeals filed by the assessee are directed against separate orders of CIT(A), Hyderabad for the AYs 2006-07 to 2008- 09. As the common issues are involved in these appeals, the same were clubbed and heard together and therefore a common order is passed for the sake o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of the term 'asset'. In this case, the said Cars are neither stock-in-trade nor the assessee is in the business of running them on hire. The application of the said vehicles in the assessee's business may be peculiar, but without an explicit sanction in the Act for their exclusion from the meaning of the term 'Asset' for the purpose of computation of net wealth they cannot be excluded. Hence, there is no other alternative except to treat such vehicles as assets within the meaning of section 2(ea) of the Wealth Tax Act . 3. Aggrieved with the above order, assessee preferred an appeal before the CIT(A). The CIT(A) has given some relief to the assessee, but, has not given any finding on the definition of assets u/s 2(ea) of the Act. The finding of the CIT(A) are given below: 6. Having considered the information on record I do not find any necessity to interfere with the addition made by Assessing Officer as definition of asset as per sec.2(ea)(ii) means 'motor cars other than those used by the assessee in the business of running them on hire or stock in trade'. The motor cars owned by the assessee were neither used for the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he interpretation which favors the Assessee/tax payer should be applied and towards this the Assessee cited' 6 cases of Supreme Court. Therefore, from this point of view also the action of the Learned CWT(A) is unjustified and illegal. 6) The reasons assigned by the Authorities below are wrong, insufficient and illegal. 5. The ld. AR submitted that the Assessee is a private limited Company and an Authorized Dealer cum service provider of cars manufactured by Maruti Udyog Limited. It is submitted that for the purpose of carrying out Business, out of the cars received from the principal, some cars are retained by assessee for rendering services to the customers as well as training of the staff of assessee. It is submitted that the Assessee uses these cars to provide various services that include giving test drives or demonstration of the vehicles, providing car driving training to customers, using them as mobile service vans, etc. Apart from this, the Assessee also keeps pick up vans for towing vehicles. 5.1 The ld. AR submitted that these cars are intrinsic part of the Business of Assessee and the Appellant cannot carry on the Business without the use of these vehi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndments to be made in the Wealth Tax Act) while presenting finance Act 1992 that the taxability of an asset for purpose of wealth tax should be based on distinction between productive and non productive assets. Thus, the taxability should be from point of view of use/productivity of the asset for business rather than those of the assets and the assessee is using the motor cars not as motor cars but as an equipment or plant machinery, such motor cars do not fall under the definition of motor cars under section 2(ea)(ii) but they are productive asset falling under plant machinery. 5.7 The ld. AR submitted that if there is any doubt in the interpretation of a provision such doubt or interpretation is to be resolved in favour of the assessee as has been held by Hon'ble Supreme Court in number of cases that whenever any provision of the act is of nature of double interpretation or ambiguous or doubtful nature in such circumstances the interpretation which favours the assessee should be followed and adopted. For this proposition, he relied on the decisions of Hon'ble Supreme Court in CIT, Punjab v. Kuly Valley Transport [77 ITR, Page 518 (SC)] Mysore Minerals Limited v C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... productive and non-productive assets. The Chelliah Committee has suggested that, in order to encourage the taxpayers to invest in productive assets such as shares, securities, bonds, bank deposits, etc. and also to promote investments through Mutual Funds, these financial assets should be exempted from wealth tax. Wealth tax should be levied on individuals, Hindu undivided families and all companies only in respect of nonproductive assets such as residential houses including farm houses and urban land, jewelry, bullion, motor cars, planes, boats and yachts which are not used for commercial purposes. 7.1 In the given situation, there is no doubt the cars were used in the business, which are essential to run the business, which are applied in the business similar to plant and machinery . The intent of the legislature to exclude the cars which are used in the business for running them on hire. Here, these are excluded because the cars are used as plant and machinery , simply to generate revenue. Similarly in the assessee s case, the cars are used as plant and machinery . In our considered view, when the cars are used in the business which are productive will have the same mea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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