CA Kanhaiya Kumar Agarwal
Brief Facts of the Case and Question of Law:
The Assessing Officer while computing the total wealth of the assessee added the value of the let-out properties i.e. godown and offices in the total wealth of the assessee for the purpose of calculating the wealth-tax. The assessee claimed that the let-out properties are not assets within the meaning of section 2(ea) of the Wealth Tax Act. The Assessing Officer did not agree. The assessee went in appeal before the CIT(Appeals) and the CIT(Appeals) deleted the addition after verifying and noting that the assessee has given the factory building/ godown building on rent. This fact has not been denied by the Revenue.
Question of Law
Whether factory building/ godown building given on rent will be included in the net wealth of the assessee.
Contention of the Assessee
The assessee claimed that the let-out properties are not assets within the meaning of section 2(ea) of the Wealth Tax Act.
Contention of the Revenue
The Revenue was aggrieved with the order of CIT(Appeals) where the Ld. CIT(A) had quashed the order of the AO in which the AO had treated assesee’s factory building/godown building given on rent as asset under the provisions of section 2(ea) of the Wealth Tax Act, 1957.
Held by ITAT
We noted that under section 2(ea)(i)(5) any property in the nature of commercial establishment or complex are to be excluded from the term ‘asset’. The properties under construction are godowns. This has been let out. The godowns could be used relating the business purposes and, therefore, it relates to the
business or trade. The nature and purpose for the use of property are commercial. No contrary evidence has been brought on record or brought to our knowledge by the ld. D.R. that the properties let out or even on rent are not used for commercial purposes. In view of this fact, we are of the view that no interference is called for in the order of CIT(Appeals).
The Hon’ble ITAT accordingly confirm the order of CIT(Appeals) wherein the CIT(Appeals) has deleted the addition of let out property from net wealth of the assessee.