Business-use residential property excluded from net wealth when accepted as such in income-tax assessment.

A residential property accepted as being used for business purposes in income-tax assessment could not be treated differently in wealth-tax proceedings. Because the property was found to be used for business purposes, its value was excluded from the assessee's net wealth under the applicable exemption, and the statutory exclusion applied. The referred question was answered in favour of the assessee and against the Revenue.

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Issues: Whether a residential property treated as business premises in income-tax proceedings could be excluded from the assessee's net wealth under section 40(3)(vi) of the Finance Act, 1983.

Analysis: The property had been accepted by the Income-tax Officer as being used for business purposes in the assessee's income-tax assessment under section 143(3) of the Income-tax Act, 1961. On that basis, the same property could not be treated differently in wealth-tax proceedings. Where the property is found to be used for business purposes, its value is not includible in the net wealth of the assessee and the statutory exemption applies.

Conclusion: The exclusion of the property's value from the assessee's net wealth was and the answer to the referred question was in the affirmative, in favour of the assessee and against the Revenue.

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