2003 (1) TMI 655 - AT - Income Tax

Tribunal rules helicopter used for business qualifies for depreciation

Garware Wall Ropes Ltd. Versus Addl. Cit,

The tribunal ruled in favor of the assessee, holding that the helicopter used for the assessee's business and with claimed depreciation qualified as being ... - Issues:Whether the value of a helicopter used for the purpose of the assessee's business is exigible to wealth-tax.Analysis:The judgment revolves around the issue of whether the value of a helicopter used for business purposes is subject to wealth-tax. The tribunal consolidated three appeals concerning this identical issue. The main contention was the interpretation of the term 'used for commercial purposes' in relation to the helicopter owned by the assessee. The departmental representative argued that the helicopter should be used for running on hire to be exempt from wealth-tax. However, the tribunal rejected this narrow interpretation, emphasizing that the statute does not mandate hire usage for commercial purposes. The term 'commercial purpose' was analyzed, drawing from legal dictionaries and precedents to establish its meaning in the context of the case.The tribunal referred to the definition of 'commercial purpose' from various sources, including legal dictionaries and court judgments, to elucidate that the term encompasses activities related to trade, traffic, and commerce aimed at making a profit. The Finance Minister's statement and the Chelliah Committee's recommendations were also cited to support the distinction between productive and non-productive assets for wealth-tax purposes. The tribunal highlighted that the term 'commercial purpose' should be understood in the context of profit-making activities, aligning with the ordinary business usage of the asset in question.The tribunal analyzed the provisions of section 2(ea) to differentiate between assets used for commercial purposes and those used for hire or as stock-in-trade. It clarified that the term 'commercial purposes' does not necessitate hire usage but signifies business-related activities aimed at generating profit. The tribunal emphasized the importance of interpreting statutory language based on its plain meaning, focusing on the legislative intent behind the provision. In this case, the tribunal concluded that the helicopter, being used for the assessee's business with depreciation claimed, qualified as being used for commercial purposes and thus exempt from wealth-tax.In light of the comprehensive analysis and interpretation of the term 'commercial purpose,' the tribunal ruled in favor of the assessee, directing the Assessing Officer to delete the addition made for wealth-tax assessment concerning the helicopter. The appeals of the assessee were allowed, emphasizing the distinction between personal and commercial usage of assets for wealth-tax purposes.