2016 (2) TMI 74

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....he Wealth Tax Act, 1957 (hereinafter referred to as the 'Act'). 2. The issues to be decided in these appeals are assumption of jurisdiction of the Learned AO by issuance of notice u/s 17 of the Act and whether in the facts and circumstances of the case, the property situated at Bangalore which has been let out to a tenant would be outside the ambit of wealth tax u/s 2(ea)(i)(5) of the Act. 3. The brief facts of this issue is that the assessee did not originally file its wealth tax return for the Asst Years 2006-07 and 2007-08. The Learned AO had reason to believe that the wealth in respect of one property had escaped assessment and accordingly issued notice u/s 17 of the Act. In response to the said notice, the assessee filed Nil return o....

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.... of the wealth tax. 4. The Learned AR argued that the subject mentioned property is a commercial complex and used only for commercial purposes and used by the tenant M/s Inland Road Transport P Ltd as godowns. He further relied on the decision of the co-ordinate bench decision of this tribunal in the case of WTO vs Ferrolite Products Ltd reported in (2015) 55 taxmann.com 285 (Kolkata Tribunal) in support of his contentions. In response to this , the Learned DR vehemently supported the orders of the lower authorities. 5. We have heard the rival submissions and perused the materials available on record. With regard to the first ground raised by the assessee on assumption of jurisdiction, we find from the records that the Learned AO had rig....

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....unal in the said case is that the assessee rented out premises to 'D' Ltd and rental income was assessed under the head 'income from house property'. The assessee claimed that the said property was in the nature of commercial establishment as per section 2(ea)(i)(5) of the Act and thus it could not be included in the net wealth of assessee. The AO treated the factory premises being the land and building as taxable wealth within the meaning of section 2(ea). The CIT(A) finding that the factory premises was being used for productive purposes and was in the nature of commercial establishment, allowed assessee's claim. On revenue's appeal to tribunal, it was held as follows:- "7. The facts emerges are that total area of land consists of 20164....

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....us, the word 'commercial complex' means the commercial multi-purpose building composed and made of inter-relating parts in contrast to a single commercial establishment. In the case of commercial establishment, it is not necessary that it should be composed of or made of interrelated parts. The Legislature has excluded both commercial establishment as well as commercial complexes from the definition of "asset" for the purpose of chargeability to tax under the Act. 8. Further, the Memorandum explaining the provisions in the Finance No. 2 Bill, 1998, under the head "Incentives proposed under the Wealth-tax Act", it is clarified that wealth-tax is not levied on productive assets. In view of this logic, it is proposed that wealth tax would a....