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TMI Blog1988 (6) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... th-tax Officer was of the opinion that a cinema theatre building belonging to the assessee was not exempt. He valued the dame by capitalising the net annual rent of Rs. 30,978 by 12 1/2 times and brought to the sum of Rs. 3,87,225. This was confirmed on appeal. 3. In the further appeal before us, it was contended on behalf of the assessee that under section 40(3)(vi) of the Finance Act, 1983 which is be read as part of the Wealth-tax Act, plant and machinery are not chargeable to tax and since a theatre building has been held to be a plant, it cannot be taxed. In the alternative, it was contended that section has been amended to example theatre building and it should be given retrospective effect. On the other hand, it was contended on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of its business or as residential accommodation for its low paid employees will be excluded from net wealth." Accordingly, section 40 of the Finance Act, 1983 brought to tax the net wealth of the company which was the aggregate value of all the assets referred to in sub-section (3) which is in excess of the aggregate value off the debts owed by the company as on the valuation date. Sub-section (3) of section 40 read as follows : (3) The assets referred to in sub-section (2) shall be the following, namely :- (i) gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals : (ii) precious or semi-precious stones whether or not set in any furniture, utensil or other article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch as Shanti Enterprises [IT Appeal No. 602 (Bang.) of 1982] and santosh Enterprises [IT Appeal Nos. 569, 589 and 590 (Bang.) of 1979]. The contention of the revenue was that in this particular case, cinema theatre has not been treated as a plant for income-tax purposes. But in our opinion, it makes no difference to the situation because we find that the object of this legislation was only to tax unproductive assets not actually utilised in the business. Since the cinema theatre in this case is actually a source of income of the assessee, even though it might not have been assessed under the head 'Business' which may require the treatment of the cinema theatre as a plant for income-tax purposes, we must accept the contention of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely :- (vi) building or land appurtenant thereto, other than building or part thereof used by the assessee as factory, godown, warehouse, cinema house, hotel or office for the purposes of its business or as a hospital, creche, school, canteen, library, recreational centre, shelter, rest-room or lunch room mainly used for the welfare of its employees or used as residential accommodation, except as provided in clauses (via) and (vib), and the land appurtenant to such building or part :' It can be seen that in clause (iv) the words 'cinema house' have been included in the list of items of buildings used by the assessee and exempt from wealth-tax. The Memorandum explaining this provision stated as follows: "54, Under the existing provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (i) a proviso is inserted. Similarly in sub-clause (ii) certain words are to be inserted in clause (a) and a proviso is to be added in clause (d) Naturally these clauses can take effect only from the date when these works are inserted or added. But in clause (c) the Act says that for clause (iv), the following clauses shall be substituted. The word 'substituted' is of great significance, especially when contrasted with the other two words "Inserted" and "added" in the same section. It is to be presumed that Parliament has advisedly used this word to give it a meaning quite different from the other two so that it means that this amendment is in fact, a declaratory statute. As noted in the Memorandum explaining these provisions itself, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that new clause shall be taken to have been incorporated in place of the old clause from the very inception. This is also clear from the wording of the original clause itself which stated that building used by the assessee for the purpose of its business shall be exempt. The list of items such as factory, godown, warehouse, etc., cannot be exhaustive but only illustrative of the buildings exempt from wealth-tax. The clause itself has to be read ejusdem generis. This rule applies when " (i) the statute contains an enumeration of specific words; (ii).the subjects of enumeration constitute a class or category; (iii) that class or category is not exhausted by the enumeration; (iv) the general terms follow the enumeration; and (v) there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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