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TMI Blog2012 (6) TMI 909X X X X Extracts X X X X X X X X Extracts X X X X ..... ute only with effect from 01.04.1999 through the Finance (No. 2) Act, 1999? 3. The assessee filed its return of wealth for the assessment year 1996-97 on 21.10.1997 showing net wealth of ₹ 7,34,000/-. In the wealth tax return the value of two properties, that is, office premises at Worli, Mumbai and bunglow at Versova Beach was shown to be ₹ 73,756/- and ₹ 4,92,378/- respectively. However, in the Special Audit Report received under section 142(2A) of the Income Tax Act, 1961, the value of the two properties was worked out at ₹ 1,24,42,237/- and ₹ 2,12,50,000/- respectively. The auditors, accordingly, estimated the market value of these two properties as on the valuation date at ₹ 3,36,92,237/- as against the market value of ₹ 5,66,134/- shown in the return. The assessment was, therefore, reopened under section 17 of the Act. In the assessment order framed under section 16(3) read with section 17 of the Act, the market value of these two properties was taken at ₹ 3,36,92,237/- as against the value of ₹ 5,66,134/- disclosed in the original return. The present case pertains to the property situated at Worli in respect of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the Wealth Tax Act. 6. Mr. Manish Bhatt, learned senior standing counsel appearing on behalf of the appellant assailed the impugned order by placing reliance on the findings recorded by the Assessing Officer was well as the Commissioner (Appeals). 7. Opposing the appeal, Mr. Bhargav Karia, learned advocate for the respondent-assessee made reference to section 2(ea)(i) of the Act. Section 2(ea) of the Act as it stood at the relevant time, and insofar as the same is relevant for the present purpose reads as under: (ea) assets in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means- (I) any guest house and any residential house including a farm house situated within twenty-five kilometres from the local limits of any municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee or by any other name) or a cantonment board,but does not include- (1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory provisions. Section 3 of the Act which is the charging section provides for levy of wealth-tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the specified rates. Net wealth is defined under section 2(m) of the Act to mean the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth on that date under the Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date which have been incurred in relation to the said assets. Thus, net wealth is to be computed on the aggregate of the value of the assets belonging to the assessee as stipulated thereunder. Therefore, for the purpose of falling with in the ambit of net wealth, the value of the assets belonging to an assessee is required to be taken into consideration. In relation to the assessment year commencing on the first day of April, 1993, or any subsequent assessment year, the expression assets has been defined under section 2(ea) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial building, farm house situated within 25 kilometres of the municipal town. But did not include commercial building. It had specifically referred to some kinds of buildings while it omitted to include the other kinds. Therefore, only the kinds included are taxable and not the others. This position becomes clear by reason of the amendment sought to be brought about, as is apparent from the amendment effective from April 1, 1997. The amended provision included building used for commercial purposes. This itself indicates that the buildings used for commercial purposes were not subject-matter of taxation prior to the said amendment. This was explained at page 238 of [1996] 220 ITR (St.). This explanation is self-explanatory. We would do better if we leave at that and quote the explanation itself, viz.: The proposed amendment seeks to enlarge the definition of assets. Under the existing provisions, assets include guest house, residential house and farm house. It is proposed to include in the definition any house whether used for residential or commercial purposes or as guest house.It is also proposed to exclude any house allotted by a company to its employees, etc., and any hou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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