2017 (7) TMI 1474 - HC - Wealth-tax

Assessee's Connaught Circus and Lane properties held commercial establishments under Section 2(ea)(i)(5), excluded from taxable assets

PRINCIAL COMMISSIONER OF WEALTH TAX–7 Versus M/s ORIENTAL BUILDING & FURNISHING CO. LTD

HC upheld the ITAT's finding that the assessee's properties in Connaught Circus and Connaught Lane are 'commercial establishments or complexes' within ... 'Commercial Establishments or Complexes' under the Wealth Tax Act, 1957 - ITAT held that the properties of Assessee at Connaught Circus, New Delhi and Sardar Mohan Singh Building, Connaught Lane, New Delhi were 'Commercial Establishments or Complexes' and therefore outside the purview of 'assets' under Section 2 (ea) (i) (5) of the Wealth Tax Act, 1957 (WTA)? - as urged by Revenue, that the expression 'commercial establishments or complexes' should be understood only in the plural and not in the singular HELD THAT:- The Court is unable to agree with the above submission. It is obvious from a reading of the entire Section 2 (ea) WTA that the legislative intent was not to restrict the benefit of exemption any particular type of commercial establishments or complexes. By reading such a restrictions into the said clause, the Court would be writing into Section 2 (ea) WTA something which is not there. Bombay Bench of ITAT has sought to suggest that a commercial establishment means a building comprising more than one establishment meant for commercial purpose and having the infrastructure and ancillary facilities and establishments such as banking, financial institution, supermarket, bar etc. The Court is unable to find any such qualification attaching to the expression 'Commercial Establishments or Complexes' in Section 2 (ea) (i) (5) of the WTA. This Court concurs with the above view of the Gujarat High Court in Vasumati Ben Chhaganlal Virani [2013 (9) TMI 957 - GUJARAT HIGH COURT] as regards the interpretation of Section 2 (ea) (i) (5) WTA. Therefore, we find that the impugned order of the ITAT does not suffer from any legal infirmity. Issues:1. Delay in filing appeals.2. Exemption applications.3. Interpretation of the term 'Commercial Establishments or Complexes' under the Wealth Tax Act, 1957.Analysis:1. The Court condoned the delay of 9 days in filing appeals and disposed of the applications related to the delay.2. Exemption applications were allowed subject to all just exceptions.3. The main issue revolved around the interpretation of the term 'Commercial Establishments or Complexes' under the Wealth Tax Act, 1957. The Revenue appealed against an order by the Income Tax Appellate Tribunal (ITAT) regarding the classification of properties owned by the Assessee as 'Commercial Establishments or Complexes' exempt from being considered as 'assets' under the Act.4. The Assessee classified its properties as residential and commercial, claiming that certain properties were 'Commercial Establishments or Complexes' and thus not considered as 'assets' for Wealth Tax Act purposes. However, the Assessing Officer disagreed with this classification, leading to a dispute.5. The ITAT disagreed with the Assessing Officer and held that the properties in question formed part of larger commercial establishments, citing a previous decision of the Gujarat High Court for reference.6. The Court addressed the argument presented by the Revenue that 'commercial establishments or complexes' should be understood in the plural form, requiring multiple tenants. The Court rejected this interpretation, emphasizing that such a restriction was not present in the legislative intent of the Act.7. Referring to a decision of the Bombay Bench of ITAT, the Court clarified that there were no specific qualifications attached to the term 'Commercial Establishments or Complexes' under the Act, rejecting the notion that it must comprise multiple commercial establishments.8. The Court concurred with the interpretation provided by the Gujarat High Court, emphasizing that the exclusion of properties from being considered as 'assets' under the Act did not require the property to be occupied by the owner, as long as it fell under the definition of 'Commercial Establishments or Complexes.'9. Ultimately, the Court found that the ITAT's decision was legally sound, dismissing the appeals and concluding that no substantial question of law arose from the interpretation of the term 'Commercial Establishments or Complexes' under the Wealth Tax Act, 1957.