TaxTMI 
TaxTMI 
2015 (8) TMI 483
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....t floor, Building No. A & F 1st Floor and 2nd Floor of Unity Chambers are not assets as per section 2(ea)(i)(5) the Wealth Tax Act, 1957 without appreciating the fact that the assessee had given different treatment to those assets and converted them from stock in trade to capital asset. 2. On the facts and circumstances of the case and in law, the order of the Ld. CWT(A)-II, Nashik be cancelled on the above issue and that of the A.O. be restored. 3. The appellant craves leave to add, alter, modify, delete amend any of the grounds at any stage of appellate proceedings. 4. The appellant prays to file any of the additional evidence appropriate to the grounds taken in appeal." 3. Facts of the case, in brief, are that the assessee fi....
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....t is seen that the AO has identified and considered two/three properties for the purpose of taxation under the Wealth Tax Act, 1957. The properties are as under:- s. No. Name & Address of the property Valuation worked out by the AO 1. Building No. E-lst floor, multi storied building known as Unity Chambers, Jalgaon Rs. 5,02,350/- 2. Building No. A & F, 1st and 2nd Unity Chambers, Jalgaon Rs. 56,29,000/- According to the AO, the above mentioned properties are assets which are taxable under the W.T. Act because the appellant had converted stock-in-trade into capital assets. Accordingly, the AO proceeded with the valuation of the properties as indicated above and the same was brought to tax under the W.T....
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....es in the nature of commercial complex. Therefore, I am of the view that the said properties are not assets as per the section 2(ea)(i)(5) of the W. T. Act and hence, not to be included in the appellant's net total wealth. The appeal of the appellant is allowed." 5. Aggrieved with such order of CWT(A) the Revenue is in appeal before us. 6. The Ld. Counsel for the assessee at the outset referred to the decision of the Tribunal in the case of Dy.CWT Vs. Smt.Taradevi Ratanlal Bafna vide WTA Nos. 18 and 19/PN/2013 order dated 08- 07-2015 for A.Yrs. 2009-10 & 2010-11 and submitted that under identical facts and circumstances the appeal filed by the Revenue was dismissed where the action of the AO in treating value of such properties as....
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.... are shown under the head "income from house property" in the return of income filed under the income-tax Act. We find the Ld.CWT(A) allowed the claim of the assessee for non inclusion of the same in the net wealth by following various decisions which has already been reproduced in the preceding paragraphs. We do not find any infirmity in the order of the CWT(A) on this issue. So far as the decision of the Pune Bench of the Tribunal in the case of Nutan Warehousing Co. Pvt. Ltd., (Supra) is concerned we find the Hon'ble Bombay High Court vide WTA Nos. 2807,2808,2925,2926,3421/2010 order dated 16-06-2011 has restored the issue to the file of the AO for reconsideration of the issue afresh by observing as under : "2. The question raised in ....
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....39;assets' as defined in clause (i) of section 2(ea). Further that it nowhere provides that only if such commercial complex is occupied by the owner then alone the exclusion shall take effect. On both counts thus contention of the Revenue cannot be accepted. It is significant to note that exception sub-clause (3) of clause (i) of section 2(ea) pertains to any house which the assessee may occupy for the purposes of any business or profession carried on by him. Thus whenever legislature desired that exclusion may apply only if property is self occupied, it was so provided. Significantly, in sub-clause (5), there is no such insistence." 10.2 Similarly, the Pune Bench of the Tribunal in the case of Shri Subhash H. Lodha (Supra) while dec....
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....ng Explanation (5) to section 2(ea) the nature and use of the property is material. Following the aforesaid precedent, it is clear that in order to evaluate a claim for exclusion based on Explanation (5) to section 2(ea)(i) of the Act, the assessee has to demonstrate that the property is in the nature of commercial establishment or complexes, though the commercial activity may not be carried by the assessee himself. In the present case, the assessee had pointed out that the properties at Market Yard, Pune, are commercial shops used for carrying out commercial activities and the same have been let out and the occupants are using it for such commercial activities. Even with regard to the property let out at Pune Camp and at Lalbaug Society, t....