TaxTMI 
TaxTMI 
2011 (12) TMI 344
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.... are being disposed of by this common order for the sake of convenience. Wealth Tax Appeal No. 63/Mum/2011 for A.Y. 2004-05 (By assessee). 2. The assessee in its grounds of appeal has challenged the order of the CWT(A) in confirming the action of the A.O. in holding that the commercial asset used by the assessee substantially and partly given on lease are not business assets and thus includible into the 'net wealth' u/s 2(ea) of the Wealth tax Act. 2. Facts of the case in brief are that the A.O noted that the assessee has let out its business premises located at 401 and 501 Olympia, Hiranandani Gardens, Powai, Mumbai and received a rent of Rs.64,36,320/- The A.O. asked the assessee to show cause as to why the s....
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....ultiplying the net maintainable rent by 12.5 times. 2.1 Before the ld. CWT(A) it was submitted that substantial part of their head office was used by them for business purposes and they have offered the amount of rent received from letting out a part of their head office premises to other companies to tax under the head "income from house property". It was further submitted that their case falls under the exclusion provided u/s.2(ea)(i)(3) and uIs.2(ea)(i)(5) of the W.T. Act. The assessee also relied on the following decisions: 1. Ajax Products Ltd.'s case [1965] 55 ITR 741 (SC) 2. Mayank Poddar(HUF) vs Wealth-tax Officer (2003) 262 JTR 633 (Cal.) 3. CIT vs. Shankaranarayana Industries 194 Taxman 189 ....
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....hments or complexes;" 4.2 From the above, it may be noted that for exclusion in clause (3) as claimed by the appellant, the house has to be occupied by it for any business or profession carried on by him. In this case, letting out of the house property is not the business carried on by the appellant. This fact is further supported by the computation of income filed during the course of Income tax proceedings along with the return of income wherein the assessee itself has treated the rental income under the head income from house property. This exclusion in clause (3) is not available to the appellant. Regarding exclusion in clause (5), as noted by the A.O, no commercial facilities normally available in a commercial complex have be....
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....ubmitted that the assessee is a business enterprise and the property is in the nature of a business asset. He submitted that the AO and Ld. CIT(A) are not justified in holding that the property is not a commercial asset. He submitted that the registered office of the company is at 401-Olympia and the only object of the company is to do business. He submitted that the registered office of the company cannot under any circumstances be considered as other commercial establishment. Referring to the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Shankaranarayana Industries and Plantations (P) Ltd. reported in 194 Taxman 189, he submitted that a commercial asset used by an assessee in business of letting out properties cannot....
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.... is in the business of letting out properties. All other types of commercial properties are taxable under the Wealth Tax Act. Since the assessee in the instant case has let out a part of its business premises and since the assessee is not in the business of letting out properties, therefore, the said property, in our opinion, is not exempt either u/s. 2(ea)(i)(3) or 2(ea)(i)(5) of the Wealth Tax Act. The various decisions relied on by the Ld. Counsel for the assessee are distinguishable and are not applicable to the facts of the present case. In this view of the matter and in view of the detailed order passed by the Ld. CIT(A) we do not find any infirmity in his order holding that the let out property of the assessee is taxable as per the d....