9911796707
TMI Blog1996 (8) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... amac Street building together with the incomplete portions of the assessee's three buildings situated at Camac Street, Wood Street and Purandas Road, shown by the assessee as work-in-progress. Aggrieved thereby, the assessee-appellant preferred its first appeal before the CWT(A) who, vide his impugned order, disposed of the appeal as mentioned above. The assessee, aggrieved thereby, has come up in appeal before the Tribunal. 3. The assessee originally raised two grounds of appeal and then raised two additional grounds of appeal on 10-7-1996 and further raised five additional grounds on 15-7-1996 as mentioned below : Original grounds of appeal-- (1) For that the order of the learned Commissioner of Wealth-tax (Appeals) is contrary to the facts and the circumstances of the case. (2) For that the learned Commissioner of Wealth-tax (Appeals) grossly erred in upholding the order of the Assessing Officer treating the stock-in-trade (Building in progress) of Rs. 1,49,56,002 as part of the taxable wealth in utter disregard to the provisions contained in section 40(3) of the Finance Act, 1983. It is prayed that the aforesaid sum should be deleted from the computation of the net weal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned above and considering the fact that the perusal of the record shows that the aforesaid additional grounds do arise from the impugned order and emanate from the matters in dispute in appeal under consideration and that by the ld. D.R. too no substantial objection has been raised, and considering all the facts and circumstances of the case the said additional grounds are hereby admitted. 5. We have heard the arguments of both the sides and perused the record. 6. A perusal of the record shows that mainly three matters are in dispute in this appeal which are the let out portion of the Camac Street Building, the work-in-progress part of the assessee's three buildings mentioned above and own office use part of the Camac Street Building. We are first taking up ground No. 1 of the additional grounds dated 10-7-1996. This ground pertains to the let out portion valued at Rs. 1,30,77,362. The ld. A.R. has raised two-fold arguments in this regard. He has contended that the assessee is a property developer and its main business is to construct flats and sell them and that till a buyer of flat at a price offered by the assessee is suitably available the flats are temporarily let out s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supported the orders of the authorities below and argued that the said assets are taxable to wealth-tax and have been rightly so brought to tax. 7. We have considered the rival contentions and also perused the cited decisions. In Chugandas Co.'s case, the Hon'ble Supreme Court has laid down that the heads of income described in section 6 and further elaborated for the purpose of computation in following sections of the Income-tax Act, 1922 are intended merely to indicate the classes of income and that the heads do not exhaustively delimit sources from which income arises. Business income is broken up under different heads only for the purpose of computation of total income. In Shrikishan Chandmal Co.'s case, the Hon'ble M.P. High Court allowed the carried forward business loss to be set off against dividend income from shares held as stock-in-trade. The Hon'ble High Court laid down that the heads of income described in section 6 and elaborated in the following sections do not exhaustively define sources for the purpose of computation of total income and the break-up thereby indicated should not be regarded as rigidly delimiting the source of income under different heads for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrowings and particularly so when there happens to be a lull in the business. As such it cannot be denied that the assets are being used for productive purposes and not for unproductive purposes. The assessee's case is that even after the unsold flats having been let out, as and when suitable buyer is available, they sell the let out flats also as some instances of the same have also been given by the learned representative of the assessee in the course of his arguments and mentioned in para 6 above. This factual position unmistakably leads us to the conclusion that the unsold let out flats constitute the assessee's stock-in-trade in the business. Under proviso to section 40(3) of the Finance Act, 1983, any asset referred to in clause (vi) which is held by the assessee as a stock-in-trade in a business carried on by it is excepted from being included in the taxable asset. As such the aforesaid let out portion of the building being stock-in-trade of the assessee falls within the aforesaid proviso and is therefore excludible from the taxable asset and as such is exempt. The impugned order of the ld. CIT(A) in upholding the assessment order on this count is not tenable. 8. Now we t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actually being used by the assessee for the purpose of the office for its own business. Accordingly the impugned order of the ld. CIT(A) in confirming the said disallowance by the WTO is erroneous and untenable. 11. In original grounds, ground No. 2 pertaining to the building in progress has been dealt with above and ground No. 1 is general calling for no specific decision on our part. 12. In grounds of appeal dated 10-7-1996, ground No. 1 which pertains to the let out portion, has already been discussed above, and ground No. 2 disputes the computing of gross wealth and gross assets as per balance sheet according to wrong calculation and assessing the net wealth at Rs. 1,37,28,900, which we now take up along with ground Nos. 2(iii) and (iv) dated 15-7-1996. This ground No. 2 generally embraces the whole dispute covering all the three types of disputed matters which have already been specifically dealt with above and so the issues raised here in ground Nos. 2,2(iii), (iv) do not call for any specific decision as such for the same are now no more necessary for the disposal of the appeal. Similar is the position regarding ground No. 2(ii) of the grounds dated 15-7-1996 as it perta ..... 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