Industrial-use property retains its commercial character for wealth tax and is not treated as urban land merely because it was later sold.

Property used as a commercial or industrial asset, and supported by industrial-use evidence such as a no-objection certificate, industrial electricity billing, and municipal treatment as non-residential, was not treated as urban land for wealth-tax purposes. The later sale of the property with the structure standing on it did not change its character for the relevant assessment years. On that basis, the disputed addition was deleted under the Wealth Tax Act.

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Issues: Whether the land and building owned by the partnership firm, used earlier for manufacturing activity and supported by industrial-use materials, constituted an asset chargeable to wealth tax under the definition of urban land.

Analysis: The relevant enquiry was whether the property retained the character of a commercial establishment or had become includible urban land for wealth-tax purposes. The materials on record, including the industrial no-objection certificate, electricity billing at industrial rates, and municipal treatment of the property as non-residential/commercial, supported the claim that the premises were used as a business asset. The subsequent sale of the property with structure did not by itself convert its earlier character for the assessment years in question. A property with existing structures used in earlier years for manufacturing remained outside the mischief of the wealth-tax definition of urban land.

Conclusion: The property was not taxable as urban land under the Wealth Tax Act for the assessment years under appeal, and the addition was deleted.

Final Conclusion: The assessee succeeded on the substantive wealth-tax issue, resulting in deletion of the disputed addition, while the remaining grounds did not survive for adjudication.

Ratio Decidendi: Property used as a commercial or industrial asset, and not shown to have lost that character for the relevant assessment year, cannot be treated as urban land merely because it was sold later with the structure standing on it.

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