Aircraft Owned & used by Assessee for travel of its Directors exempt from wealth Tax

One Comment

1. Surender K Singal says:

   Costs in favour of Appellant-Assessee may generally be helpful in discouraging Assessing Officers to refrain from non-sustainable disallowances / penalty etc. which unwarrantedly add to litigation;

     Reply

   April 10, 2016 at 5:10 pm
2. ca.devkumarkothari says:

   ca.devkumarkothari
   Thanks for un-necessary litigation by revenue – it add to professionals assignments and fees but at cost of national resources – we must avoid it as good and responsible citizens.
   Going back to my initial studies of commerce in 9th class, I believe that the concept of commercial purpose is well known and there should not be dispute on this aspect even at assessment stage. Business of plying, hiring, leasing etc. of vehicles or other plant or machinery are recognized as such as a separate nature of business in various provisions of direct taxes for deductions by way of depreciation and other allowances, exemptions, presumptive tax etc. Such activities are part of ‘commercial purpose’. It is not that hiring, plying of vehicles are only commercial purposes. Besides in the definition of asset, under WT Act itself, both these activities find different treatment in respect of different type of vehicles some are liable to WT and some are exempted assets.The AO was not at all justified in this case to initiate un-necessary litigation by not excluding aircraft from taxable wealth. The CIT(A) and Tribunal have concurrently allowed appeal. Judgment in case of Garware (supra.) was rendered on 21.03.2003and was reported belatedly during 2004 vide [2004] 89 ITD 221 (MUM.)
   is quite old, and it is admitted that this judgment was accepted by revenue, therefore there was no justification of CIT (Judicial) and other officers proposing appeal before the High Court in the year 2013 (WT Appeal no. 1 of 2013), and counsels of revenue was also not justified in recommending filing of appeal before High Court. There is a system of finding out settled legal position before moving in appeal.Thus this was a fit case for awarding costs in favour of assessee. Tribunals and High courts can impose costs in such cases as a measure to reduce un-necessary litigation.
   Let us hope revenue will not file appeal before the Supreme court. When judgments of two Supreme Court Judgments can be disputed before three judges, we must not be shocked if revenue appeal against judgment of High Court to treat impugned aircraft as taxable asset.
   Readers can read some other articles about unnecessary litigation on http://www.taxmanagementindia.com
   Professionals like advocates, CA and other tax practioners should also make some efforts to reduce un-necessary litigation.

     Reply

   August 31, 2013 at 6:32 am
3. CA Dev Kumar Kothari says:

   Thanks for un-necessary litigation by revenue – it add to professionals assignments and fees but at cost of national resources.
   This judgment is again a case of un-necessary litigation by revenue. The concept of commercial purpose is well known and there should not be dispute on this aspect even at assessment stage.
   Business of plying, hiring, leasing etc. of vehicles or other plant or machinery are recognized as such as a separate nature of business in various provisions of direct taxes.
   Such activities are part of ‘commercial purpose’. It is not that hiring , plying of vehicles are only commercial purposes.
   The AO was not at all justified in this case to initiate un-necessary litigation by not excluding aircraft from taxable wealth. The CIT(A) and Tribunal have concurrently allowed appeal. Judgment in case of Garware (supra.) which was reported in 2004 is quite old, and it is admitted that this was accepted by revenue, therefore there was no justification of CIT (Judicial) and other officers proposing appeal before the High Court in the year 2013, and counsels of revenue was also not justified in recommending filing of appeal before High Court.
   Thus this was a fit case for awarding costs in favour of assessee. Tribunals and High courts can impose costs in such cases as a measure to reduce un-necessary litigation.
   Let us hope revenue will not file appeal before the Supreme court.

   Professionals like advocates, CA and other tax practioners should also make some efforts to reduce un-necessary litigation.

     Reply

   August 30, 2013 at 7:18 pm