Commercial-establishment exception under Wealth-tax Act applied to factory land and buildings, with appurtenant land not separately valued

Land and building used as a factory, together with courtyard, electrical substation, labour quarters, office and godown, were treated as property in the nature of a commercial establishment or complex within the section 2(ea)(i)(5) exception, and the open land was regarded as appurtenant to the built-up area rather than separately taxable urban land. The reasoning also applied section 13 of the General Clauses Act to read singular expressions as including the plural where necessary. The conclusion recorded that the land and building were taxable net wealth and that the Revenue's challenge failed.

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Issues: Whether the value of the assessee's land and building was includible in net wealth under section 2(ea) of the Wealth-tax Act, 1961, or fell within the exception for property in the nature of commercial establishments or complexes.

Analysis: The property consisted of factory building, courtyard, electrical substation, labour quarters, office and godown, and the open land was found to be appurtenant to the built-up area. The relevant exception in section 2(ea)(i)(5) excludes any property in the nature of commercial establishments or complexes from the definition of assets. The property was let out and used for productive commercial purposes, and the reasoning adopted treated the nature of the property and its use as decisive. The open land was also held not to warrant separate valuation as urban land, and the Tribunal relied on the principle that the exception for commercial establishments and complexes is not confined to a single unit and that singular words may include the plural under section 13 of the General Clauses Act, 1897.

Conclusion: The land and building were held to be the taxable net wealth and the Revenue's challenge failed.

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