TaxTMI 
TaxTMI 
2015 (6) TMI 728
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....ompany. It did not file wealth tax return at the first instance. The Assessing Officer noticed from its income tax records that it had received rent pertaining to two new sheds totaling Rs. 84,28,800/-. This made him to issue a notice u/s.17 of the Act. The assessee filed its reply admitting ownership of the factory building for the purpose of manufacturing plastic processing machinery. It stated to have allotted certain space therein to its sister concern for enabling them to carry on their business in lieu of charging rent. The assessee would also invite Assessing Officer's attention towards section 2(ea)(3) of the Act exempting such houses/buildings occupied for the purpose of business or profession. The Assessing Officer did not agree. ....
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....iness; whereas another such building though not occupied but under the ownership of your appellant is held as such for a period of about 10 years, which has been described here as a new factory building used for commercial purpose only. It is in this behalf further submitted that the old factory building being under the occupation and ownership of your appellant, right from the beginning it has been shown as business asset and hence depreciation thereon is also claimed and allowed as such; whereas the new factory building though owned but not so occupied, is shown as an asset only. (2). About the Rental Income earned from two factory buildings.:- Your appellant at this stage respectfully invites Your Honour's attention on the crucial ....
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....et on which the depreciation is also allowed, is taxed as business income in Income-tax; whereas the rental income of Rs. 39,28,800/- being from a new factory building though owned but not occupied is taxed under the head Income from house property. (3). Legal submissions.:- In view of the above Your Honou's attentation is invited on S.2(ea) of Wealth-tax Act '57 which reads about the definition of " assets " chargeable to Wealth-tax, wherein it is also stated as to what is not included within the meaning of" assets " is mentioned in clause (3) and (5), which has been reproduced as under :- Clause (3). Any house which the assessee may occupy for the purpose of any business or profession carried on by him. AND Clause (5). Any pr....
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....t should not be brought to Wealth - tax through Sch. Ill rule 3 of the W.T. Rule '57. In view of the above Your Honour is requested to please treat both the factory buildings as business assets carrying on the activities of a commercial nature both should be held as exempt from Wealth tax. Please refer to above and in continuation of the written submissions D.05/01/2011 attached with the appeal filed on Dt. 12/01/2011, Your Honour's attention is invited on the further submissions stated as under, which may please be read along with the legal submissions explained in oara 3 on page 2 of the written submissions D. 05/01/2011 as stated above. That, S.2 (ea) of the Wealth-Tax Act '57, even before its amendment w.e.f. 07/04/97 was....
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....g the properties or the houses enumerated in sub. C/s. (1) to (5) from the main enactment the intention of the legislature becomes clear that the legislature did not intend to bring all buildings or land appurtenant thereto, whether used for residential or commercial purposes within the ambit of "assets" chargeable to tax under the W. T. Act. Further, in order to cover a case under sub. Cl. (5) it is not necessary that the propoerty in the nature of commercial establishment or complex, should be occupied by the assessee for the purpose of any business or profession carried on by him as in the case covered by Sub. Cl. (3): because the nature and, purpose of use of the property is material, irrespective of the fact,: whether it has been used ....
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....purpose of any business or profession carried on by them, as the case may be. To claim benefit of the sub cl.(5), one must prove and establish that the property claimed to be excluded from the definition of "assets", should be in the nature of commercial establishments or complexes. In this sub-cl.(5), complexes or establishments" are qualified with an adjective commercial, establishment or complex, therefore, must be of a commercial in nature. The word commercial means something which is used in or related to, a business or a trade. Commercial means relating to or engaged in or used for commerce. The word establishment' means an organization, building, construction, shop, store, concern or corporation. Thus, commercial establishment m....