Commercial property used for business purposes falls outside wealth-tax assets where its commercial character is established.

Industrial sheds used in the assessee's manufacturing business and yielding rental income were treated as commercial property and excluded from "assets" under section 2(ea)(5) of the Wealth-tax Act, 1957. The controlling test was the commercial character of the property and the nature and purpose of its use, not whether the assessee occupied it itself. As the Revenue produced no material to dislodge the finding that the sheds were used for business purposes, the exclusion was upheld and the sheds were not includible in net wealth.

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Issues: Whether industrial sheds used in the assessee's business and generating revenue therefrom were excluded from the definition of "assets" and therefore not liable to wealth-tax under section 2(ea)(5) of the Wealth-tax Act, 1957.

Analysis: The assessee owned industrial sheds at G.I.D.C. Estate, Vatva, which were used in its business of manufacturing plastic processing machinery and from which it derived rental income. The lower appellate authority held that the sheds were commercial in nature and therefore fell within the exclusion for property in the nature of commercial establishments or complexes. The Tribunal agreed that for clause (5), the decisive considerations are the commercial character of the property and the nature and purpose of its use, and not whether it was occupied by the assessee itself. In the absence of any material from the Revenue to dislodge the finding that the sheds were used for business purposes, the exemption was upheld.

Conclusion: The industrial sheds were not includible in the assessee's net wealth under section 2(ea)(5) of the Wealth-tax Act, 1957.

Ratio Decidendi: Property in the nature of a commercial establishment or complex, when used for business purposes, is excluded from the definition of "assets" for wealth-tax purposes; the controlling test is the commercial nature and use of the property, not exclusive self-occupation by the assessee.

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