TaxTMI 
TaxTMI 
2009 (3) TMI 499
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.... excluded from the definition of assets under section 2(ea) of the Wealth-tax Act? 3. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in not deducting the proportionate debts while computing the net wealth as per the pro-visions of section 2(m) of the Wealth-tax Act? 4. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming the value of the properties at guideline value or cost inflation index or valuation report when the actual sale realization of property sold in open market by public auction as per the order of the High Court was much less than the above values? 5. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming the levy of wealth-tax on the properties owned by the appellant company in which public are substantially interested? 6. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming the value of guest houses when it held that only fifty per cent. of the values are only liable to wealth-tax in the asses....
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....) Act, 1985. The assessee converted certain properties as stock-in-trade in the year 1981-82. The assessee filed wealth-tax return for the assessment year 1993-94 declaring wealth of Rs. 8,77,741. The Assessing Officer, however, completed the assessment determining the net wealth at Rs. 47,15,24,500. Against the assessment order, the assessee filed an appeal before the Commissioner of Wealth-tax (Appeals), who partly allowed the appeal. Against that order, both the assessee and the Revenue filed appeals before the Income-tax Appellate Tribunal. The Tribunal dismissed the assessee's appeal and partly allowed the Department's appeal. Hence the present appeals before this court at the instance of the assessee. 4. The assets included and valued for ascertaining the wealth-tax liability are guest houses worth Rs. 21,81,52,524, urban land worth Rs.25,30,10,443, and motor cars worth Rs. 18,61,500 and ultimately charged wealth-tax in a sum of Rs. 47,15,24,500. 5. The primary contention raised by the learned counsel for the assessee is that the properties under consideration were partly occupied by the employees, who were drawing salaries of less than Rs. 2 lakhs per annum. Though the pro....
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....tion has been placed on the appellate power of the Commissioner (Appeals) in section 23 of the Wealth-tax Act, 1957. When he entertains an appeal under the provisions of the Wealth-tax Act, the Commissioner (Appeals) is, as competent as the Assessing Officer is in relation to all matters concerning the assessment which are within the scope of the Assessing Officer while making the assessment. The scope of the appellate power under the Income-tax Act was considered by the apex court in the cases of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 ; Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 (SC) and CIT v. Nirbheram Daluram [1997] 224 ITR 610 (SC). The power of the appellate authority is wide as that of the Assessing Officer is emphatically stated in these decisions. In the case of Kanpur Coal Syndicate [1964] 53 ITR 225 (SC), the apex court dealt with sections 3, 31(3)(b), (4), 33(4) of the Indian Income-tax Act, 1922, which is similar to section 251(1)(a) of the Income-tax Act, 1961. The apex court in that case observed that the Appellate Assistant Commissioner has plenary powers in disposing of an appeal. The scope of his power is coterminous with that of the Income-t....
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....appellant company. They relied on the judgment of the Madras High Court in the case of CIT v. Carborandum Universal Ltd. [2000] 241 ITR 407 wherein it was held that the transit houses used by the employees are not guest houses as understood in the Income-tax and Wealth-tax Acts . . ." 13. However, this contention has been rejected in paragraph 2.4 thus: "I have considered the rival submission of the appellant's counsel. The first argument that the guest houses are business assets and hence to be excluded, does not stand to reason as it was not the claim of the appellant at any proceedings at any time, except now . . . " 14. This action of the Commissioner of Wealth-tax in rejecting the contention is against the well recognised principle of law, as aforesaid. The Commissioner ought to have given an opportunity to place the materials as required under the Rules and ought to have adjudicated the issue without rejecting the same on the premise that it has not been taken before. The action of the appellate authority, in rejecting the ground as not being taken before the lower authority, is nothing but negation of the power that vests with him and also against the well recognised prin....
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.... the land contiguous to the building was applied to user other than the enjoyment of the building, then that provides a safe indication regarding the extent of land applied for such user. For instance, the land used by the occupiers for commercial or agricultural purpose although forming part of the land adjacent to the building, does not qualify to be treated as land appurtenant to the building; (4) If the owner or occupier is deriving any income from the lands which is not liable to be assessed as income from house property under section 22 of the Income-tax Act, 1961, then the extent of such land does not qualify to be treated as land appurtenant to the building ; and (5) Any material pointing to the attempted user of the land for purposes other than the effective and proper enjoyment of the house would also afford a safe guide to determine the extent of surplus land not qualifying to be treated as land appurtenant to the building. The above tests are illustrative and by no means exhaustive. It is for the tax authorities to apply their mind properly to the facts of each case and to devise tests suitable and appropriate to each case. 17. In the case of M. K. Kuppuraj, (HUF) v....