Business use of let-out office premises can exclude the building from wealth-tax under section 40, where commercial exploitation is shown.

A building let out as office space with allied services and amenities may be treated as used in the assessee's business, so it falls outside the wealth-tax charge under section 40 of the Finance Act, 1983. The decisive factors were the company's business objects, the manner of accounting, lease arrangements, and the provision of lift, electricity, water, furniture, generator and maintenance staff, which showed a commercial venture rather than passive ownership. The fact that some receipts were assessed under a different income head did not change the business character of the property's exploitation.

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Issues: Whether the assessee's building, used for letting out office space with allied services, was excluded from wealth-tax under section 40 of the Finance Act, 1983.

Analysis: Section 40 of the Finance Act, 1983 brought to tax the net wealth of closely-held companies but excluded buildings used by the assessee as factory, godown, warehouse, hotel or office for the purpose of its business. The decisive question was whether a property exploited by letting out with services and amenities could still be regarded as being used for the assessee's business. The assessee's constitutional objects, accounts, lease arrangements, provision of lift, electricity, water, furniture, generator, and staff for maintenance showed that the activity was not mere passive ownership but the carrying on of a commercial venture. The fact that part of the receipts was assessed under a different income head did not alter the business character of the exploitation of the property.

Conclusion: The building was used in the assessee's business and therefore fell outside the charge under section 40 of the Finance Act, 1983. The assessee's claim was allowed.

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