Wealth-tax treatment of unfinished factory buildings depends on whether the structure is capable of the specified use.

Investment in an incomplete and unfinished factory building was outside the wealth-tax inclusion under section 40(3)(vi) of the Finance Act, 1983 because the clause applied only to a building or part thereof capable of being used for the specified purposes. On the facts stated, the structure remained under construction during the relevant assessment year and was not fit for any use by the assessee, so it did not answer the statutory description of an includible asset. The text also states that refusal to make a reference under section 27(3) of the Wealth-tax Act, 1957, was justified, and the petition failed.

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Issues: Whether the investment in an incomplete and unfinished factory building was liable to be included in the assessee's wealth under section 40(3)(vi) of the Finance Act, 1983, and whether refusal to make a reference under section 27(3) of the Wealth-tax Act, 1957, was justified.

Analysis: Clause (vi) of section 40(3) applied only to a building or part thereof that was capable of being used by the assessee for the specified purposes. The building in question was under construction and remained incomplete and unfinished in the relevant assessment year. On the facts found, it was not capable of any use by the assessee. An unfinished structure, not yet fit for use as a factory building, did not fall within the statutory description of an includible asset.

Conclusion: The investment was not excludible from the scope of the relevant wealth-tax provision on the ground urged by the assessee; the Tribunal was correct in declining to refer the question, and the petition failed.

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