Income Tax Appellate Tribunal - Chennai
Acit, Central Circle - 1,, Coimbatore vs M/S. May Flower Enterprises Pvt. Ltd.,, ... on 4 May, 2021
आयकर अपीलीय अिधकरण, 'सी' ायपीठ, चे ई
IN THE INCOME-TAX APPELLATE TRIBUNAL 'C' BENCH, CHENNAI
ी धु ु आर.एल रे ी, ाियक सद एवं ी जी. मऺजुनाथा, लेखा सद के सम
Before Shri Duvvuru RL Reddy, Judicial Member &
Shri G. Manjunatha, Accountant Member
आयकर अपील सं./W.T.A. No. 59/Chny/2019
िनधारण वष/Assessment Years: 2013-14
The Assistant Commissioner of M/s. May Flower Enterprises Pvt. Ltd.,
Wealth Tax, Central Circle 1, Aayakar Vs. No. 72, Balasundaram Road,
Bhavan, 63, Race Course Road, Coimbatore 641 0218.
Coimbatore 641 018. [PAN:AABCM4463F]
(अपीलाथ /Appellant) ( थ /Respondent)
अपीलाथ की ओर से / Appellant by : Shri G. Johnson, Addl. CIT
थ की ओर से/Respondent by : Shri K. Vishva Padmanabhan, C.A.
सु नवाई की तारीख/ Date of hearing : 27.04.2021
घोषणा की तारीख /Date of Pronouncement : 04.05.2021
आदे श /O R D E R
PER DUVVURU RL REDDY, JUDICIAL MEMBER:
This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Wealth Tax (Appeals) 19, Chennai, dated 28.05.2019 relevant to the assessment year 2013-14. The Revenue has challenged the deletion of addition of ₹.46,72,353/- towards the difference between the value of vehicles as reflected in the balance sheet and disclosed in the return of net wealth and deletion of addition of ₹.9,34,756/- being excess of cash in hand reflected in the balance sheet above ₹.50,000/-.
2. Brief facts of the case are that the assessee is a company and engaged in real estate development by construction of multi-storied 2 W.T.A. No.59/Chny/19 residential flats and commercial complexes. Scrutiny assessment in the case of the assessee for the assessment year 2013-14 was completed on 22.03.2016. During the course of income tax proceedings, the Assessing Officer noticed that the assessee was in possession of various assets such as land, vehicle (car), cash in hand (in excess of ₹.50,000/-), which are coming under the ambit of Wealth Tax Act, 1957. Since the assessee has not filed the wealth tax return for the assessment year 2013-14 and the net wealth chargeable to tax has escaped assessment within the meaning of section 17 of the Wealth Tax Act, a notice under section 17 of the Wealth Tax Act was issued and served on the assessee. In response to the notice, the assessee filed the return of wealth tax for the assessment year 2013-14 on 13.12.2018 declaring a net wealth of ₹.27,90,900/-. Notice under section 16(2) of the Wealth Tax Act was also issued and served on the assessee.
3. In the wealth tax return, the assessee has shown asset of motor cars valued at ₹.27,90,908/-, whereas as per the balance sheet, the assessee was in possession of vehicles valued at ₹.74,63,621/-. Before the Assessing Officer, the assessee has explained that the said block of vehicles included not only cars but also included trucks, tractors and other construction related vehicles and the WDV of cars alone are included as assets. Since the assessee has not provided the list of vehicles other than cars which it claimed were included in the block of vehicles, the Assessing Officer could 3 W.T.A. No.59/Chny/19 not ascertain as to whether the same were used for assessee's business or not. Accordingly, ₹.46,72,353/- being the difference between the asset of motor cars valued by the assessee at ₹.27,90,908/- and the asset of vehicles valued in the balance sheet at ₹.74,63,621/- was added to the returned net wealth of the assessee. On appeal, after considering the submissions of the assessee and in view of the provisions of section 2(ea) of the Wealth Tax Act, the ld. CIT(A) deleted the addition.
4. Aggrieved, the Revenue is in appeal before the Tribunal. Since, the objection raised by the Revenue Audit Party (RAP) has been accepted by the Department, the ld. DR has submitted pleaded to adjudicate the appeal on merits.
5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below including various case law and other details of vehicles owned by the assessee. Since the details of entire vehicles owned by the assessee to ascertain as to whether the same used for assessee's business or not, were not available before the Assessing Officer during the course of wealth tax assessment, the difference between the asset of motor cars valued by the assessee and the asset of vehicles valued in the balance sheet was brought to tax. On appeal, after considering the submissions of the assessee as well as considering the details furnished in the schedule depicting the written down value of all the 4 W.T.A. No.59/Chny/19 other vehicles comprised in the block besides motor cars and the provisions of section 2(ea) of the Wealth Tax Act, the ld. CIT(A) held that only motor cars are to be brought within the ambit of wealth tax and not other vehicles. We have perused the wealth tax Act and relevant portion of section reads as under:
Section 2(ea) [(ea) "assets", in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means -
--
[(i) any building or land appurtenant thereto (hereinafter referred to as "house"), whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality (whether known as Municipality, Municipal Corporation or by any other name) or a Cantonment Board, but does not include - --
(1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole- time employment, having a gross annual salary of less than five lakh rupees; (2) any house for residential or commercial purposes which forms part of stock-in-trade;
(3) any house which the assessee may occupy for the purposes of any business or profession carried on by him;
(4) any residential property that has been let-out for a minimum period of three hundred days in the previous year;
(5) any property in the nature of commercial establishments or complexes;]
(ii) motor cars (other than those used by the assessee in the business of running them on hire or as stock-in-trade);
(iii) jewellery, bullion and furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals: Provided that where any of the said assets is used by the assessee as stock-in-trade, such asset shall be deemed as excluded from the assets specified in this sub-clause;
(iv) yachts, boats and aircrafts (other than those used by the assessee for commercial purposes);
(v) urban land;5 W.T.A. No.59/Chny/19
(vi) cash in hand, in excess of fifty thousand rupees, of individuals and Hindu undivided families and in the case of other persons any amount not recorded in the books of account."
6. From Clause ii of the above section, it is clear that only motor cars that are intended to be exigible for wealth tax and other motor vehicles will not come within the purview of the definition. After considering the details furnished in the schedule, which was also submitted before us, depicting the written down value of all the other vehicles comprised in the block besides motor cars as well as considering the above provisions of section 2(ea) of the Wealth Tax Act, the ld. CIT(A) has rightly held that only motor cars are to be brought within the ambit of wealth tax and no other vehicles. We find no infirmity in the order passed by the ld. CIT(A) on this issue and accordingly, the appellate order on this issue stands sustained.
7. With regard to the addition on account of cash in hand, as per balance sheet as on 31.03.2013 reflecting a cash balance of ₹.9,84,756/-, since the assessee has neither admitted the cash in hand in the wealth tax return filed nor has given any explanation during the course of assessment proceedings, the Assessing Officer made an addition of the amount in excess of ₹.50,000/-. On appeal, the ld. CIT(A) deleted the addition.
8. We have considered the rival submissions. Before us, by reiterating the submissions as made before the appellate authority, it was the submission of the ld. Counsel that the assessee being a company, only the 6 W.T.A. No.59/Chny/19 amount of cash that has not been recorded in the books of account needs to be brought to tax and therefore, the assessee not being an individual or HUF, the question of making any addition on account of cash in hand reflected in the balance sheet does not arise. We find force in the arguments of the ld. Counsel. In this case, the Department has not found any cash in the course of income tax scrutiny proceedings that has not been recorded in the books of account of the assessee. In view of the above facts and considering the submissions of the assessee, we are of the considered opinion that the ld. CIT(A) has rightly deleted the above addition. We find no infirmity in the order passed by the ld. CIT(A) and accordingly, the appellate order on this issue stands sustained.
9. In the result, the appeal of the Revenue is dismissed.
Order pronounced on the 04th May, 2021 in Chennai.
Sd/- Sd/- (G. MANJUNATHA) (DUVVURU RL REDDY) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 04.05.2021 Vm/-
आदे श की ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant, 2. थ / Respondent,
3. आयकर आयु (अपील)/CIT(A), 4. आयकर आयु /CIT, 5. िवभागीय ितिनिध/DR &
6. गाड फाईल/GF.