2016 (5) TMI 659

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....response, assessee has filed towards wealth tax return for the AY 2008-09 on 06/05/2013 declaring net wealth at Rs. Nil. Subsequently, notice u/s 16(2) of the W.T. Act issued. In response, assessee has claimed the assets comprising vehicles valued at Rs. 1,56,21,922/- as exempt from W.T. Tax. In this regard, assessee has submitted as below: "The above assets include WDV of Rs.l,56,21,922/- pertaining to motor cars used for running our business on which we are seeking exemption from wealth tax as they include: a) Motor cars used by us for giving demonstration and test drives required to sell new cars. These demo cars have very low resale value due to wear and tear. b) Cars used for giving driving training at our Maruti driving school c) Cars to be given temporarily to customers in case their cars develop TECHNICAL defects d) Cars provided at each of our workshops to drop the customers to the nearest public transport point after they give their cars for servicing e) Vehicles used for towing customer cars to our workshops in case of accidents, f) Vehicles used as mobile service vans g) Vehicles used for spare parts deliveries to various workshops h) And for o....

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....taining to motor cars and allow the same." 4. Aggrieved, the assessee is in appeal before us and has raised the following grounds of appeal, which are common in all the appeals under consideration except the amount of addition: 1 ) The learned CWT(A) very much erred in confirming the stand of the Assessing Officer that cars of the value of Rs. 1,56,21,922/- falls in the category of the Assets mentioned in Section 2(ea) of the Wealth Tax Act as against the claim of the Assessee that they are part of plant and machinery of the Company and are part and parcel of the Business assets of the Company without which it is not possible to carry out the business of selling and servicing of Cars. 2) The Learned CWT(A) despite agreeing to the fact that the Assessing Officer has given 9 reasons in his Assessment Order pertaining to claim of the Assessee that the Asset of Car does not fall in the category of assets mentioned in Section 2(ea) confirmed the addition made by the CWT(A). 3) The Learned CWT(A) erred in ignoring/not deciding the basic and fundamental ground of the Assessee that there is no escapement of any Wealth to warrant issue of notice u/s 17 of the Wealth Tax Act. 4)....

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.... motor cars on 31.03.2008 exceeded the maximum value of exemption limit. In response the Assessee filed Return declaring net Wealth at NIL. 5.3 The ld. AR submitted that the Assessing Officer though convinced about the application of these vehicles in the Business of the Assessee as Equipment or Plant & machinery still included the Written down value of these vehicles on 31.03.2008 in the Net Wealth of the Assessee and accordingly assessed the Net Wealth at Rs. 1 1,56,21,922/- (WDV of these vehicles on 31.03.2008). 5.4 The ld. AR submitted that the Commissioner of Wealth Tax(Appeals)-3, Hyderabad confirmed the action of Assessing Officer by holding that under section 2(ea)(ii) asset means 'motor cars other than those used in the business of running, them on hire or stock in trade' and the motor cars owned by Assessee were neither used for the business of running them on hire nor as stock in trade. 5.5 The ld. AR submitted that the kind of asset is a Business asset and does not fall in the category of asset as described in sec.2(ea)(ii). He pointed out that they are equipment or plant & machinery forming part and parcel of fixed assets without which the Business of Assess....

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.... integral part of assessee's business and which are complimentary to increase the business. AO has accepted this peculiar services, which are imperative in the assessee's business. The AO and CIT(A) have considered the cars used in the business of the assessee as assets for wealth tax purpose due to the fact that section 2(ea) of the Act has not explicitly sanctioned the exclusion of cars in the given situation. Let us analyse the section 2(ea)(ii) of the Act. "Motor cars (other than those used by the assessee in the business of running them on hire or as stock-in-trade):. From the plain reading of this subsection gives clarity that the intent of the Legislature to eliminate those cars which are used in the business and which are productive in running the business. This is the reason statute has explicitly allowed the cars which are applied in the business of running on hire or as stock-in-trade. The intention of the legislature is very clear and it should be interpreted harmoniously and with complete meaning. From the plain reading, it is "absoluta sentential expositore non indigent". The language used by the legislature best declares its intention and must be accepted as decisive....