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Issues: (i) whether the assessee's entire multi-storey building could be treated as business premises so as to escape additional wealth-tax under paragraph A(2) to Schedule I of the Wealth-tax Act, 1957; (ii) whether only the portion actually used for business and the relevant liabilities should be excluded from additional wealth-tax computation.
Issue (i): whether the assessee's entire multi-storey building could be treated as business premises so as to escape additional wealth-tax under paragraph A(2) to Schedule I of the Wealth-tax Act, 1957.
Analysis: The expression business premises was construed to mean the place where business is actually carried on. A building consisting of several flats, even if held as stock-in-trade and exploited through a partnership venture, could not in its entirety be treated as business premises. The wider notion of property being used for the purpose of business did not justify treating the whole structure as exempt from additional wealth-tax.
Conclusion: The contention that the entire building was exempt as business premises was rejected and was against the assessee.
Issue (ii): whether only the portion actually used for business and the relevant liabilities should be excluded from additional wealth-tax computation.
Analysis: A distinction was drawn between the whole building and the portion actually used for carrying on business. The Tribunal held that the business-used portion could be excluded, and in the interests of justice the matter should be sent back for identification of that portion. It also directed examination of the liabilities for deduction.
Conclusion: The matter was remitted to the Wealth-tax Officer to earmark the business-used portion and to consider deductible liabilities, in favour of the assessee to that extent.
Final Conclusion: The assessee failed on the claim for blanket exemption of the entire building, but obtained partial relief by way of remand for segregation of the business portion and consideration of liabilities.
Ratio Decidendi: For additional wealth-tax purposes, only the part of property actually used as the place of business can be treated as business premises; the entire building cannot be exempted merely because it is exploited in the course of business or forms stock-in-trade.
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