Bandyopadhyay, AM - (1.) THE issue involved in all these wealth-tax appeals filed by the assessee for the three successive years is common. Hence, the appeals have been consolidated and a common order is being passed for the sake of convenience.
(2.) The Assessing Officer noted during the course of the wealth-tax assessment proceedings that the assessee had obtained permission on 25-8-1986 from the State Government to sell three plots measuring 997.9 sq. mtrs. each at the rate of Rs. 3,20,000 each. In the wealth-tax returns filed by the assessee for these three years, however, the value of these plots of land was not declared. It was contended by the Assessing Officer that the plots under consideration were "appurtenant lands" of the factory belonging to the assessee. The Assessing Officer discussed that two of the plots under consideration were situated in the factory building area. At the same time again, he held that the plots of land were there all along and that they were never being used as part of the factory and since the assessee had proposed to sell these plots of land and the Government had also granted permission to do so, the plots of land could not be considered as appurtenant land to the factory. Accordingly, he estimated the values of the lands at certain rates and included the same within the assessable wealth of the assessee for the three years under consideration. In the first appeals also, the CWT(Appeals) held that in the circumstances of the case that the Government had granted permission to the assessee to sell the lands, it was difficult to accept the proposition that those plots of land were factory land. The CWT(Appeals) stated that if the plots of land were absolutely necessary for maintaining and running of the factory or under the relevant enactments governing the factory and its environs, the State Government would have never granted permission for sale of the lands. The CWT (Appeals) therefore, upheld the action of the Assessing Officer in including the value of the plots of land within the assessable wealth of the assessee. So far as however, the valuation of the land is considered, he remitted the matter back to the file of the Assessing Officer with certain directions for re-determining the market value of the land.
(3.) THE assessee has come up in appeals before us against the aforesaid action of the CIT (Appeals) in confirming the inclusion of the value of the lands within the assessable wealth of the assessee. We find that in accordance with clause (vi) of sub-section (3) of section 40 of the Finance Act, 1983, introducing levy of wealth-tax on certain closely-held companies with effect from assessment year 1984-85, the assets to be included within the assessable wealth of an assessee of the relevant type would include "building or land appurtenant thereto other than building or part thereof used by the assessee as factory...... for the purpose of its business...... and the land appurtenant to such building or part". In the instant case, therefore, the matter to be considered is whether the plots of land can be held to be appurtenant to the factory building of the assessee. THE word "appurtenant" has not been defined in the Income-tax Act or the Wealth-tax Act. THE dictionary meaning of the word as per Oxford Illustrated Dictionary is "belonging, appertaining". Stroud's Judicial Dictionary also ascribes the same meaning as above to the expression "appurtenant" or "appurtenances". Venkataramaiah's Law Lexicon also gives the meaning of the word "appurtenant" as "pertaining or belonging". In the instant case, therefore, it is required of us to try to find out whether the plots of land under consideration can be considered to be belonging or pertaining to the factory building. THE Assessing Officer himself states in the assessment orders that two of the plots under consideration were situated in the factory building area. In that way, therefore, they may be considered to be pertaining or belonging to the factory building. For the purpose of being belonging or pertaining to the factory building, it is not necessary that the land under consideration must be fully inseparable from the factory building and can never be sold away separately. THEre is also nothing there in the dictionary meaning or legal meaning of the expression "appurtenant" to show how much immediate the land should be to the factory building as such. Any factory building is supposed to be surrounded on all sides by some plots of land and usually the entire property will also be covered by a boundary wall. It cannot be said that unless a plot of land within such area is required to be used in connection with the process of manufacture etc., ensued in the factory building, such portion of land cannot be considered to be appurtenant to the factory building. In ordinary and also in legal sense therefore, what is part of the factory building area will have to be considered as land appurtenant to the factory building. In the instant case, therefore, on the basis of the noting made by the Assessing Officer himself in the assessment orders that two of the plots of land were situated within the factory building area itself, we are of the opinion that such plots of land would have to be considered as "land appurtenant" to the factory building. We, therefore, partially reverse the orders of the lower authorities and direct that the values of two of these plots should not be included within the assessable wealth of the assessee. So far as the third plot is concerned, no specific mention has been made about its location, although it appears that the said plot is not exactly located within the factory building area. If that be so, then this plot of land cannot be considered to be appurtenant to the factory building. In any case, the matter with regard to inclusion of this very plot of land within the assessable wealth of the assessee is being remitted back to the file of the Assessing Officer for determining the exact location of the said plot. If the said plot was also found to be situated within the factory building area, its value need not be included for wealth-tax purpose. Otherwise however, its value as ascertained by the Assessing Officer and upheld in further appeals will have to be included within the total wealth of the assessee.;