TRACSTAR INVESTMENTS P LTD Vs. DY CWT
INCOME TAX APPELLATE TRIBUNAL
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G.C. Gupta, Judicial Member -
(1.) THIS appeal by the assessee for the assessment year 2001-02 is directed against the order of CWT(A). The grounds of appeal Nos. 1 to 3 of the assessee are as under:
1. The net wealth determined in the case of assessee by assessing officer at Rs. 3,01,17,993 is unjustified, unwarranted and excessive.
(2.) The learned assessing officer ought to have held that the residential flat at NCPA Apartment is not chargeable to wealth-tax.
The learned Commissioner (Appeals) erred in confirming the value assessed by assessing officer at Rs. 3,01,12,105 for NCPA apartment as asset chargeable to wealth-tax.
2. The learned Counsel for the assessee submitted that the main dispute in this case was regarding the addition of Rs. 3.01 crore on account of value of NCPA flat at Nariman point, Mumbai. He submitted that the flat in question was used for business purpose of the assessee in all the preceding assessment years and, therefore, did not fall in the definition of "assets" as given in Section 2(ea) of the Wealth Tax Act, 1957. The assessing officer has not charged the value of this flat up to the assessment year 2000-01 to wealth-tax as the same was used for business purpose of the assessee. In the subsequent assessment years, the wealth-tax was not charged on the value of this flat as the fiat was let out by the assessee for the whole of all the previous years relevant to subsequent assessment years. He submitted that the relevant assessment year 2001-02 was the only assessment year in which the assessing officer had added the value of the flat to the net wealth of the assessee. The Id. Counsel for the assessee submitted that the flat in question was used for a part of the year for business purpose of the assessee, while the flat was let out for residential purpose for a period of 270 days in the previous year. He submitted that the object of the definition of the word "assets" is to levy wealth-tax only on unproductive assets. He contended that the wealth-tax is not levied on productive 'assets'. He submitted that a harmonious interpretation of the provision of Section 2(ea) of the Act defining the word "assets" should be made and since the assessee has occupied the flat for the purpose of his business for a part of the previous year and in the other part of the previous year, the flat has been let out for residential purposes and therefore, the flat in question was used for the whole of the previous year as a productive asset and qualified for exemption as provided under Section 2(ea)(i)(3) read with Section 2(ea)(i)(4) of the Act. He submitted that the ALV of the flat has been assessed for a period of 11 months by the assessing officer in the Income-tax assessment of the assessee for the relevant assessment year. Learned Counsel for the assessee relied on the decision of Mumbai Tribunal in Hindustan Construction Co. Ltd. v. Dy. CIT, (2007) 14 SOT 450 and of Hon'ble Madhya Pradesh High Court in Smt. Shashi Varma v. CIT(1997) 224 ITR 106.
3. Learned Departmental Representative on the other hand has relied on the order of assessing officer and the Commissioner (Appeals). He submitted that the provision of Section 2(ea) of the Wealth Tax Act was very clear on the issue. Since the flat in question was admittedly not let out for a minimum period of 300 days in the previous year, the assessee is not entitled to exemption thereon.
(3.) WE have considered the rival submissions carefully. WE find that the material facts of the case are not in dispute. WE find that the flat at NCPA Mumbai belonging to the assessee-company was not let out for residential purpose for a minimum period of 300 days in the relevant previous year. The flat in question was used for business purpose in the preceding assessment years and the assessee was allowed exemption thereof from the levy of wealth-tax as per the provisions of Section 2(ea)(i)(3) of the Act. In the subsequent assessment years, the assessee was again allowed exemption as the residential property was let out for more than the minimum period of 300 days in the previous years relevant to the subsequent assessment years. However, each assessment year is independent and the levy of wealth-tax on a particular asset has to be decided in accordance with the facts of the case and law applicable to the assessment year under consideration. In the relevant assessment year 2001-02, the flat was let out for residential purposes for a period of 270 days in the previous year and, therefore, the conditions for grant of exemption as provided in Section 2(ea)(i)(4) are not satisfied in this case. The objects of a provision of law and harmonious interpretation of the statute cannot be stretched to the extent so as to cause violence to the provision of the statute itself.;
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