Wealth-tax business occupation exemption fails where premises are merely licensed out and the assessee lacks actual use and enjoyment.

Wealth-tax exemption for a house occupied for business requires the assessee's actual occupation and use of the premises in a business or profession carried on by it. Merely authorising leasing activity in the memorandum of association, or treating rental receipts as business income, was insufficient to show a continuous and systematic business of letting. Where the first and second floors were given on leave and licence and the licensee had actual use and enjoyment, the assessee could not claim business occupation. The alternate plea that the property was not owned by the assessee also failed because the arrangement created no demise, tenancy, or transferable interest that displaced ownership for wealth-tax purposes.

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Issues: (i) Whether the first and second floors of the building given on leave and licence basis could be excluded from net wealth as a house occupied by the assessee for the purposes of business under the wealth-tax exemption; (ii) Whether the assessee could avoid inclusion of the property on the plea that it was not the owner under the relevant ownership provisions.

Issue (i): Whether the first and second floors of the building given on leave and licence basis could be excluded from net wealth as a house occupied by the assessee for the purposes of business under the wealth-tax exemption.

Analysis: The exemption for a house occupied for business requires actual occupation by the assessee for a business or profession carried on by it. Mere authorisation in the memorandum of association to carry on leasing activity, or assessment of rental receipts under the head business income, did not establish that the assessee was engaged in a continuous, systematic business of letting property. The premises were in the actual use and enjoyment of the licensee, and in a leave and licence arrangement the occupier is the person who enjoys the use of the property. The assessee therefore could not be treated as occupying the property for its own business.

Conclusion: The exemption was not available and the value of the property was rightly included in the net wealth of the assessee.

Issue (ii): Whether the assessee could avoid inclusion of the property on the plea that it was not the owner under the relevant ownership provisions.

Analysis: The alternate plea depended on treating the arrangement as a transaction conferring rights of the kind contemplated by the statutory ownership provision. That plea was inconsistent with the assessee's own stand that the arrangement was only leave and licence, and the agreement itself stated that it did not create any demise, tenancy, or right in favour of the licensee. No transferable right in the property was shown so as to displace the assessee's ownership for wealth-tax purposes.

Conclusion: The ownership plea failed.

Final Conclusion: The property did not fall within the business-occupation exception and remained includible in the assessee's net wealth; the alternate challenge to ownership also failed, so the appeals were rejected.

Ratio Decidendi: For the wealth-tax exemption, the assessee must itself occupy the house in the sense of actual use and enjoyment for a business or profession carried on by it; where the property is let out on leave and licence and is enjoyed by the licensee, the exemption does not apply.

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