Income Tax Appellate Tribunal - Ahmedabad
Pasl Windtech Pvt. Ltd.,, Ahmedabad vs Department Of Income Tax on 19 January, 2016
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'C' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND
SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER
WTA No.12/Ahd/2015
नधा रण वष /Asstt. Year: 2008-2009
ITO, Ward-3(1)(2) M/s.PASL Windtech P. Ltd.
Ahmedabad. Vs 37-B, Phase-1, GIDC, Vatva
Ahmedabad.
PAN : AABCA 3022 G
अपीलाथ / (Appellant) यथ / (Respondent)
Revenue by : Shri Pradeepkumar Majumdar, Sr.DR
Assessee by : Ms.Urvashi Shodhan
सन
ु वाई क तार ख/ Dateof Hearing : 18/01/2016
घोषणा क तार ख / Date of Pronouncement: 19/01/2016
आदे श/O R D E R
PER RAJPAL YADAV, JUDICIAL MEMBER:
The Revenue is in appeal before us against the order of ld.CWT(A)-9, Ahmedabad dated 3.7.2015 passed for the Asstt.Year 2008-09.
2. Solitary grievance of the Revenue is that the ld.CWT(A) has erred in deleting the addition of Rs.6,85,58,254/- which was added by the AO in the assessable wealth of the assessee. It represents value of industrial plots and building. The ld. counsel for the assessee, at the very outset, submitted that the ld.First Appellate Authority has deleted this addition by observing that similar addition was made in the Asstt.Year 2005-06 which has been deleted by the ld.CWT(A) in the Asstt.Year 2005-06 and the order of the CWT(A) has been upheld by WTA No.2/Ahd/2015 2 the Tribunal in WTA No.2/Ahd/2012. The ld.CWT(A) has reproduced the order of the ITAT which contained the order of the ld.CWT(A) passed in the Asstt.Year 2005-06. The ld.DR was unable to controvert the contention of the ld.counsel for the assessee.
3. We have duly considered rival contentions and gone through the record carefully. It emerges out from the record that in response to the notice under section 17 of the W.T.Act, the assessee has filed wealth tax return on 6.5.2013. The ld.AO has issued notice under section 16(2) on 12.8.2013 of the W.T.Act. In response to the notice, the assessee has filed submission dated 30.10.2013. Such submissions of the assessee have been reproduced by the AO in his assessment order. In para 6 of the submissions, the assessee has contended that in the Asstt.Year 2005-06, the ld.AO has included the value of the industrial plot in the net assessable wealth of the assessee under erroneous interpretation of the provisions. This addition has been deleted by the ld.CWT(A) vide order dated 20.12.2011 in Appeal No.CWT(A)/XI/32/ ACWT Cir.5/10-11. The ld.AO after taking note of the submissions did not assign any cogent reason to include value of the asset in the net assessable wealth. He determined the value of the asset on rent capitalization method. On appeal, the ld.CWT(A) has followed the outcome of the Asstt.Year 2005-06 and deleted the addition. The Tribunal's order in the Asstt.Year 2005-06 on this issue reads as under:
"2. The assessee company derived rental income of Rs.68,94,644/- in respect of its property situated at GIDC Estate, survey No.434/1 and 982 by leasing the same to its associate concern M/s. Patel Alloy Steel Pvt.ltd. The A.O. was of the view that since the assessee was using its building for commercial purposes, the same was liable to be assessed under Wealth Tax Law. He computed value thereof as Rs.7,32,55,588/- as per Rent Capitalization under schedule-III/B of the Act, deducted basic exemption of Rs.15 lacs and computed the taxable wealth under WTA No.2/Ahd/2015 3 the provisions of the Act amounting to Rs.7,17,55,588/- in question. He framed assessment accordingly vide order dated 14- 12-2010.
3. The assessee preferred appeal. The CIT (A) has accepted its contentions on merits as under:-
"2.2 I have carefully considered rival submissions. I have also perused assessment order and the evidences submitted by Id. A.R. I have also gone through the case laws relied upon by the Id. A.R. After taking into entirety of facts in view, I am inclined to agree with the contentions of the Id. A.R. for the following reasons:
(I) It is seen that net wealth is computed by rent capitalization method in respect of deemed rent against industrial properties. These industrial properties has been rented out to the sister concerns. Perusal of record further reveals that the appellant had not charged any rent from sister concern namely, Patel Alloys Steel Private Limited against renting out of properties but accepted an interest free deposit of Rs.5,60,00,OQO/-. It is also seen that Wealth-
tax Act has been substantially amended with effect from 1-4-1995. The provisions of the W.T. Act until amendment provided for levy of wealth-tax on all the assets except those items which were specifically exempted from Wealth- tax. However, after amendment only specified assets are subjected to charge towards tax and all other assets are outside the tax net. For the purpose of levy, assets are classified as two categories one as productive and other as non productive. Under the provisions of amended Act, tax is levied only on non productive assets such as residential house, urban land, jewellery, bullion, motor car etc. In the case in hand, industrial plots are being utilized as productive assets. Accordingly, as per the provisions of amended Wealth-tax Act, these assets are out of wealth-tax net.
WTA No.2/Ahd/2015 4(ii) These assets are not subject to wealth-tax charged as per provisions of section 2(ea)(5) of the W.T.Act. This proposition is further supported by the case of Satvinder Singh Kalra v/s. DCVVT reported in 112 TTJ (,Pune)J89, wherein it was held:
"Sub-cl. (5) covers any property in the nature of commercial establishments or complexes. In order to cover a case under sub cl.(5), it is not necessary that the property in the nature of commercial establishments or complexes should be occupied by the assessee for the purpose of any business or profession carried on by him as in the case covered by sub-cl (3). Here, the nature and purpose of use of the property is material irrespective of the fact whether it is used or occupied either by the assessee himself or anybody else for the purpose of any business or profession carried on by them, as the case may be. To claim benefit of the sub cl.(5), one must prove and establish that the property claimed to be excluded from the definition, of "assets", should be in the nature of commercial establishments or complexes. In this sub-cl. (5), "complexes or establishments" are qualified with an adjective "commercial', establishment or complex, therefore, must be of a commercial in nature. The word 'commercial' means something which is used in or related to, a business or a, trade. Commercial means relating to or engaged in or used for commerce. The word "establishment" means an organization, building, construction, shop, store, concern or corporation. Thus, commercial establishment means some kind of place or building or shop or store where business or trade is carried on. "WTA No.2/Ahd/2015 5
Since these assets were rented out to sister concern for industrial use, accordingly, in my considered view these assets are productive assets and accordingly exempt as per the provisions of section 2(ea)(5) of the W.T. Act.
(iii) It is seen that A.O. has taken figure of actual rent received of Rs.68,94,644/-
from the assessment order dtd.31-12- 2007. However, this order was contested further in appeals and Hon'ble ITAT in ITA No.1165/Ahd/2009 dtd. 31-3-2011 had set aside this order to the file of Id. A.O. This way, the very assessment order which was basis of rent receipt, does not exist any more. Accordingly, net wealth worked out on the basis of rent receipt for the A.Y. 2004-05 will also not subsist.
2.3 In view of the above facts, I am of the considered view that industrial plots owned by the appellant and let out to sister concerns for industrial use are exempt from wealth-tax as per express provisions of section 2(ea)(5) of the W.T. Act. Accordingly, the addition of Rs.7,32,55,588/- made by the A.O. in the net wealth of the appellant is ordered to be deleted. These grounds of appeals are allowed."
This leaves the Revenue aggrieved.
4. We have heard both the sides and gone through the case file. It has come on record that the assessee has been letting out its plots in question to its sister concern in lieu of charging rent. The Revenue does not rebut this crucial finding. The assessee filed copy of the tribunal's order dated 17.4.2015 in income tax proceedings of the very assessment year determining 'ALV' of the plots in question. We observe in these facts that once the impugned plots are used for commercial/business purposes, they are exempted from being assessed under wealth law as per Pune bench decision (supra) of the tribunal. The Revenue fails to point out any distinction on facts or law. We affirm lower WTA No.2/Ahd/2015 6 appellate findings and reject Revenue's arguments accordingly.
5. This Revenue's appeal is dismissed."
4. There is no disparity on facts, therefore, respectfully following the order Co-ordinate Bench of the Tribunal cited supra, we do not find any merit in the appeal of the Revenue. It is dismissed.
5. In result, the appeal of the Revenue is dismissed.
Order pronounced in the Court on 19th January, 2015 at Ahmedabad.
Sd/- Sd/- (ANIL CHATURVEDI) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER