Wealth-tax treatment of let-out property depends on business use versus owner use; factual enquiry was remitted for fresh consideration.

Whether let-out property was an asset exigible to wealth-tax under section 40(3)(vi) of the Finance Act, 1983 turned on whether it was exploited as a business asset or retained for use by the assessee as owner. The enquiry required examination of the lease deed, lease period, objects clause and other surrounding circumstances in line with the principles stated in Universal Plast Ltd. v. CIT. Because the Tribunal had not undertaken a full factual examination of these matters, the issue was required to be reconsidered afresh on the existing legal framework, and the matter was remitted to the Tribunal for fresh consideration.

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Issues: Whether the property let out by the assessee was an asset exigible to wealth-tax within the meaning of section 40(3)(vi) of the Finance Act, 1983, and whether the matter required reconsideration on the factual aspects.

Analysis: The question depended upon whether the asset was exploited as a business asset or used by the assessee as owner thereof, having regard to the deed of lease, the period of lease, the objects clause and other relevant circumstances. The factual enquiry on these matters had not been undertaken by the Tribunal in full detail, and the issue had to be examined afresh in the light of the principles laid down by the Supreme Court in Universal Plast Ltd. v. CIT.

Outcome: The Court declined to answer the referred question and remitted the matter to the Tribunal for fresh consideration.

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