Income Tax Appellate Tribunal - Rajkot
Shri Jyotindrasinhji Of Gondal,, ... vs The Deputy Commissioner Of Wealth Tax, ... on 25 October, 2019
1 आयकर अपील य अ धकरण, राजकोट यायपीठ, राजकोट ।
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT ी राजपाल यादव, या यक सद य एवं ी वसीम अहमद, लेखा सद य के सम । BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER W.T.A.No.01/RJT/2010 With C.O. No.38/RJT/2011 ( नधा रण वष / Assessment Year :2005-06) D.C.W.T. बनाम/ Shri Jyotindrasinhji of Circle-1, Vs. Gondal, Rajkot. Darbar Gadh, Palace, Gondal.
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAXPJ8631R (अपीलाथ# /Appellant) .. ($%यथ# / Respondent) And W.T.A No.02/RJT/2010 ( नधा रण वष / Assessment Year : 2005-06) A.C.W.T. बनाम/ Shri Jyotindrasinhji of Circle-1, Vs. Gondal, Rajkot. Darbar Gadh, Palace, Gondal..
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AAXPJ8631R (अपीलाथ# /Appellant) .. ($%यथ# / Respondent) अपीलाथ# ओर से / Appellant by : Shri Jitendra Kumar, CIT, D.R $%यथ# क. ओर से/Respondent by : Shri D.M. Rindani, A.R. सन ु वाई क. तार ख / Date of Hearing 19/09/2019 घोषणा क. तार ख /Date of Pronounce ment 25/10/2019 आदे श / O R D E R PER WASEEM AHMED ACCOUNTANT MEMBER:
2W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 The captioned appeals have been filed at the instance of the Revenue against the separate orders of the Learned Commissioner of Wealth Tax (Appeals)-1, Rajkot [Ld. CWT(A) in short] of dated 22/10/2009 & 23/11/2009 , arising in the matter of assessment order passed under s. 16(3) of the Wealth Tax Act, 1961 (hereinafter referred to as "the Act") dated 24/12/2007 relevant to Assessment Year (A.Y.) 2005-06. The assessee has also filed Cross Objection in Revenue W.T No.01/Rjt/2010 for A.Y. 2005-06.
First, we take up W.T.A. 01/RJT/2010 for A.Y.2005-06 filed by the Revenue.
The Revenue has raised the following grounds of appeal:
1. The ld.CWT(A) erred in facts in laws in deleting addition of wealth of the U.S.A Trust valued at Rs.34,65,22,917/- and UK Trust valued at Rs.20,55,59,640/- as wealth in the hands of the assessee.
2. The ld.CWT(A) erred in facts and in laws in deleting action of valuing the flat at Bombay at Rs.31,12,491/- as against the value shown by the appellant at Rs.9825/- and directed to value as per Schedule III of the WT Act, relying upon the decision of ITAT, Rajkot Bench in appellant's own case.
3. The ld.CWT(A) erred in facts and in laws in directing to value the property known as Opera House, Bombay, as per Schedule III of the WT Act, relying upon the decision of ITAT, Rajkot Bench in appellant's own case.
4. The ld.CWT(A) erred in facts in laws in directing to re-workout the value of Jaimahal Palace Hotel & Stud Farm valued at Rs.44,96,29,324/- by the AO.
5. On legal and factual status of the case, the learned CWT(A) ought to have upheld the order of the Assessing Officer.
6. It is, therefore, prayed that the findings five in the order of the ld.CWT(A) may be dismissed/deleted and that of the Assessing Officer be restored.
7. Your appellant reserves the right to add, alter, withdrawn any/all grounds of appeal.3
W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06
2. The 1st issue raised by the Revenue is that the Ld. CWT-A erred in deleting the wealth of the USA and UK trust amounting to Rs. 34,65,22,917 and Rs. 20,55,59,640/- respectively.
3. Briefly stated facts of the case are that the assessee is an Individual. The assessee is the owner of various wealth in the form of movable and immovable properties including the immovable properties at Gondal, Rajkot, Bombay and Bangalore. The assessee filed his wealth tax return by declaring total wealth of Rs. 3,45,67,265/- dated 31-03- 2006. However, the AO in the year under consideration made certain adjustment to the total wealth of the assessee in scrutiny assessment framed u/s 16(3) of the Wealth Tax Act as detailed under:
USA / UK Trust:
a. The AO during the assessment proceedings observed that the assessee is a beneficiary of the trust located in USA and UK and accordingly he was of the view that the net wealth held by these trust are liable to be taxed under the wealth tax Act as per the provisions of section 21(2) of the Act.
b. Thus the AO by applying the provision of section 21(2) of the Act included the wealth of Rs. 34,65,22,917/- and Rs. 20,55, 59,640/- respectively in the hands of the assessee for the purpose of the wealth tax.
4. Aggrieved assessee preferred an appeal to the Ld. CWT-A, who deleted the addition made by the AO by observing as under:
4W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06
5. I have carefully considered the issue. So far as wealth of USA trusts are concerned, the AO has himself mentioned that additions in this regard has been deleted which has been upheld by the hon'ble Gujarat High Court. Apparently the decision of the jurisdictional High Court has to be followed so far as wealth of USA trusts is concerned. However, to elaborate the issue further it is to be pointed out that hon'ble Supreme Court in appellant's own case has held that so far as USA trusts were concerned, they were discretionary in nature. Apparently the wealth of such discretionary trusts cannot be assessed in appellant's hands, as sec.21(4) of the W.T. Act will come into operation. So far as UK trusts are concerned, it is to be pointed out that ITAT, Ahmedabad bench had held these trusts as specific trusts. However, the matter was taken before the hon'ble Gujarat High Court and the hon'ble Gujarat High Court in appellant's own case vide decision reported in 220 CTR page 485 has categorically held that the two trusts located in UK are also in the nature of discretionary trusts and not specific trust, as held by "Liability in special cases--Assessment of trust--Direct assessment of beneficiary visa-vis non receipt of income-- Assessee's father created trusts in UK for the benefit of the settlor and the members of his family--Sole trustee did not exercise his discretion to distribute the income of the trusts in the relevant years--No income accrued or was received by the assessee from the trusts--It is specifically stated in the accounts of the trusts that the income has been retained by the trustees and brought forward to the next years--Sec. 5 has no application and such income cannot be taxed in the hands of the assessee under s. 166--Sec. 166 can be invoked only when income is received by the assessee--Non-exercise of discretion by the trustee is a matter of fact and inference drawn by the possible interpretation of the relevant clauses of the trust deeds that distribution has taken place and assessee has received income is not sustainable--Income cannot be taxed in the hands of the assessee on the basis of such presumption-- Since the sole trustee is administering the trust property and income, and neither the settlor nor the assessee made appointment of discretion exerciser and the specified period is not over, there is no question of invoking cl. 4 of e trust deeds whereby the income is to be paid to the settlor during his lifetime and thereafter to the assessee-- Moreover, trustee having paid the tax on the income in UK, same cannot be taxed again"
The above means that even the two trusts have been held to be discretionary trust by the jurisdictional High Court and this decision has to be followed. To sum up, all the five trusts have been held to be discretionary trusts by either the hon'ble Supreme Court or the jurisdictional High Court. Therefore, following these two decisions, the wealth cannot be assessed in the hands of the appellant for the same reasoning as stated by the AO while making addition in the case related to three USA trusts, which was deleted by the ITAT, Rajkot bench. In view of the present decision of Gujarat High Court in appellant's case related to UK trusts, by which even these trusts have been 5 W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 held to be discretionary trusts, wealth cannot be assessed in appellant's hands as held in respect of other discretionary trusts by the ITAT, Rajkot bench in appellant's own case in earlier years. It is to be pointed out that ITAT, Rajkot bench in appellant's own case in WTA No.20 to 27/Rjt/2004 has held as under:
"We have no hesitation in holding that taxability of the corpus of USA trusts in the hands of assessee beneficiary are to be guided by sub- sec.(4) of sec.21 according to which the wealth tax shall be levied upon and recovery from the court of wards, administrators etc. or other persons as the case may be, in the like manner and to the same extent as it would be leviable upon the recoverable from common individual who is citizen of India and resident of India for the purpose of Wealth-tax Act."
They have clearly held that provisions of sec.21(4) would be applied so far as wealth of discretionary trusts were concerned. As of now, all the five trusts have been held to be discretionary trusts by the jurisdictional High Court in the case of UK trusts and hon'ble Supreme Court in the case of USA trusts. Therefore, the said wealth cannot be included in the wealth of the appellant and assessment can only be framed on the trustees in accordance with provisions of sec. 21(4) of the W.T. Act. Therefore, addition of wealth in relation to three USA trusts and two UK trusts is directed to be deleted from the wealth of the appellant.
Being aggrieved by the order of the Ld. CWT-A, the Revenue is in appeal before us.
5. Both the Ld. DR and the AR before us vehemently supported the order of the authorities below as favourable to them.
6. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the impugned issue has already been decided in favour of the assessee by the Hon'ble courts as observed by the Ld. CWT (A) in his order which has been elaborated in the preceding paragraph.
6W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 6.1 At the time of hearing, the Ld. DR has not brought anything on record contrary to the finding of the Ld. CWT (A). We also find that the Ld. CWT (A) has passed a speaking and self-explanatory order as reproduced herein above. Therefore we concur with the finding of the Ld. CWT (A) after placing the reliance on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. K.Y. Pilliah And Sons reported in 63 ITR 411 wherein it was held as under:
"The Tribunal is the final fact-finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Tribunal fully agreed with the view expressed by the AAC and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the ground of the AAC on which the decision was given against the assessees or the department. The criticism made by the High Court that the Tribunal had 'failed to perform its duty in merely affirming the conclusion of the AAC', was apparently unmerited. Consequently, instant appeal was to be allowed."
In view of the above, we don't find any infirmity in the order of the Ld. CWT (A) and accordingly decline to interfere in his order. Hence, the ground of appeal of the Revenue is dismissed.
7. The 2nd issue raised by the Revenue is that the Ld. CWT (A) erred in deleting the addition made by the AO for Rs. 31,12,491/- on account of the flat located at Mumbai while computing the net wealth of the assessee.
8. The assessee in the year under consideration has valued its flat at Rs. 9825.00 located at Mumbai, for the purpose of the wealth tax as per schedule-III of the Act. But the AO disregarded the valuation of the 7 W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 assessee and valued the same at Rs. 31,12,491.00 after considering the appreciation at the rate of 10% as done in the earlier assessment years.
9. Aggrieved assessee preferred an appeal to the Ld. CWT (A) who deleted the addition made by the AO by observing as under:
7. The Ld. AR pointed that hon'ble ITAT, Rajkot bench has held that in view of decision of hon'ble Supreme Court in the case of CWT vs. Sharavan Kumar & Sons, 210 ITR 886 and hon'ble Gujarat High Court's decision in the case of CWT vs. Rajeshkumar R. Gandhi reported in 19 ITR page 408, the property has to be valued as per schedule III of the W.T. Act.
8. I find that the issue is clearly covered by decision of hon'ble ITAT, Rajkot bench in appellant's own case for various years. Accordingly, AO is directed to take the value of this flat as per Schedule III of W.T. Act.
Being aggrieved by the order of the Ld. CWT-A, the Revenue is in appeal before us.
10. Both the Ld. DR and the AR before us vehemently supported the order of the authorities below as favourable to them.
11. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the impugned issue has already been decided in favour of the assessee by the Hon'ble courts as observed by the Ld. CWT (A) in his order which has been elaborated in the preceding paragraph.
11.1 At the time of hearing, the Ld. DR has not brought anything on record contrary to the finding of the Ld. CWT (A). Therefore we concur with the finding of the Ld. CWT (A) after placing the reliance on the 8 W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 judgment of the Hon'ble Supreme Court in the case of CIT Vs. K.Y. Pilliah And Sons reported in 63 ITR 411 wherein it was held as under:
"The Tribunal is the final fact-finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Tribunal fully agreed with the view expressed by the AAC and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the ground of the AAC on which the decision was given against the assessees or the department. The criticism made by the High Court that the Tribunal had 'failed to perform its duty in merely affirming the conclusion of the AAC', was apparently unmerited. Consequently, instant appeal was to be allowed."
In view of the above, we don't find any infirmity in the order of the Ld. CWT (A) and accordingly decline to interfere in his order. Hence, the ground of appeal of the Revenue is dismissed.
12. The 3rd issue raised by the Revenue is that the Ld. CWT (A) erred in directing to the AO to value the property being opera house at Bombay according to schedule-III of the W.T. Act.
13. The assessee in the year under consideration has valued its opera house located at Mumbai at Rs. Nil for the purpose of the wealth tax as per schedule-III of the Act. But the AO disregarded the valuation of the assessee and valued the same at Rs. 42,63,49,905.00 after considering the appreciation at the rate of 10% as done in the earlier assessment years.
14. Aggrieved assessee preferred an appeal to the Ld. CWT (A) who deleted the addition made by the AO by observing as under:
"12. On this, the ld.AR submitted as under;9
W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 "32. The appellant begs to submit that the said issued has already been decided in his favour by the Honourable ITAT, Rajkot bench in the assessee's own case for A.y. 1977-78, 1980-81, 1991-92 and 1992-93 to 1998-99. A copy of the said order is attached herewith at pages 102-120 of the paperbook. Your Honor's kind attention is invited to Para 23 of the said order, wherein, the Honorable I.T.A.T., Rajkot Bench, placing reliance on the decision of the Honorable Supreme Court in the case of C.W.T. Vs. Shravankumar & Sons (210 ITR 886 SC) and on the decision of the Honorabel Gujarat High Court in the case of C.W.T. Vs. Rajeshkumar R. Gandhi (219 ITR 408) has held that Schedule III of the Wealth Tax Act would be applicable to the property under consideration and that valuation be made accordingly at Rs.427,037 as has been so done in the earlier years."
13. From the above I find that the issue is covered by decision of the ITAT, Rajkot bench in appellant's own case and, as held by ITAT, Rajkot bench the AO is directed to take the value of this property as per Schedule-III of the W.T. Act."
Being aggrieved by the order of the Ld. CWT(A), the Revenue is in appeal before us.
15. Both the Ld. DR and the AR before us vehemently supported the order of the authorities below as favourable to them.
16. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the impugned issue has already been decided in favour of the assessee by the Hon'ble courts as observed by the Ld. CWT (A) in his order which has been elaborated in the preceding paragraph.
16.1 At the time of hearing, the Ld. DR has not brought anything on record contrary to the finding of the Ld. CWT (A). Therefore we concur with the finding of the Ld. CWT (A) after placing the reliance on the 10 W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 judgment of the Hon'ble Supreme Court in the case of CIT Vs. K.Y. Pilliah And Sons reported in 63 ITR 411 wherein it was held as under:
"The Tribunal is the final fact-finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Tribunal fully agreed with the view expressed by the AAC and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the ground of the AAC on which the decision was given against the assessees or the department. The criticism made by the High Court that the Tribunal had 'failed to perform its duty in merely affirming the conclusion of the AAC', was apparently unmerited. Consequently, instant appeal was to be allowed."
In view of the above, we don't find any infirmity in the order of the Ld. CWT (A) and accordingly decline to interfere in his order. Hence, the ground of appeal of the Revenue is dismissed.
17. The next issue raised by the Revenue is that the Ld. CWT-A erred in directing to rework-out the value of Jaimahal Palace Hotel & Stud Farm which was valued by the AO at Rs. 44,96,29,324.00.
17.1 The assessee in the year under consideration has valued its Jaimahal Palace Hotel & Stud Farm along with the Land at Rs. Nil for the purpose of the wealth tax as per schedule-III of the Act. But the AO disregarded the valuation of the assessee and valued the same at Rs. 44,96,29,324.00 after considering the appreciation at the rate of 10% as done in the earlier assessment years.
18. Aggrieved assessee preferred an appeal to the Ld. CWT (A) who deleted the addition made by the AO by observing as under:
11W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06
16. I have carefully considered the issue and I find that jaimahal Palace Hotel is a partnership firm being separately assessed to tax and it is in the business of running a Hotel at Bangalore. Therefore, value of this hotel cannot be totally assessed in the hands of the appellant, who is only a partner. In that case also, only interest in partnership firm can be assessed as wealth of the appellant. It is apparent that this property is being run as a hotel and it is in the nature of commercial establishment. Therefore, in view of sec.2(ea)(i)(5) of the W.T. Act, commercial assets cannot be considered as an asset under the W.T. Act. Similar would be the position of Stud Farmj However, the AO has assessed the entire value of the property in appellant's hands, which is not correct. In any case, whatever is assessable is appellant's share in the partnership firm and the AO is directed to work out interest of the appellant in these partnership firms as wealth of the appellant as per Part-E of Schedule-Ill to the W.T. Act. While doing so, he will also j keep in mind that commercial assets cannot be brought to tax. The AO will therefore, work out interest in partnership firm and if there is any taxable portion, the same can be brought to tax by him.
Being aggrieved by the order of the Ld. CWT-A, the Revenue is in appeal before us.
19. Both the Ld. DR and the AR before us vehemently supported the order of the authorities below as favourable to them.
20. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the impugned property was used as commercial establishment by the partnership firm and this fact has not been disputed by the learned DR before us. Accordingly, we hold that such property cannot be treated as wealth for the purpose of the tax under the provisions of section 2(ea)(i)(5) of the Act.
20.1 However, the interest held by the partner in the firm is subject to the tax in view of the judgment of the Hon'ble Supreme Court in the case 12 W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 of rolling Juggilal Kamlapat Bankers Vs. WTO reported in 16 taxman 1 wherein it was held as under:
"A combined reading of sections 2(e ), 2(m ) and 3 would make it clear and indisputable that a partner's interest in a firm either in his individual capacity or in his capacity as a karta of a HUF is property and the same would be includible in the expression 'assets' which will have to be taken into account while computing the net wealth, charge on which has been imposed under section 3".
20.2 At the time of hearing, the Ld. DR has not brought anything on record contrary to the finding of the Ld. CWT (A). We also find that the Ld. CWT (A) has passed a speaking and self-explanatory order as reproduced herein above. Therefore we concur with the finding of the Ld. CWT (A) after placing the reliance on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. K.Y. Pilliah And Sons reported in 63 ITR 411 wherein it was held as under:
"The Tribunal is the final fact-finding authority and normally it should record its conclusion on every disputed question raised before it, setting out its reasons in support of its conclusion. But, in failing to record reasons, when the Tribunal fully agreed with the view expressed by the AAC and has no other ground to record in support of its conclusion, it does not act illegally or irregularly, merely because it does not repeat the ground of the AAC on which the decision was given against the assessees or the department. The criticism made by the High Court that the Tribunal had 'failed to perform its duty in merely affirming the conclusion of the AAC', was apparently unmerited. Consequently, instant appeal was to be allowed."
In view of the above, we don't find any infirmity in the order of the Ld. CWT (A) and accordingly decline to interfere in his order. Hence, the ground of appeal of the Revenue is dismissed.
In the result the appeal of the Revenue is dismissed.
13W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 Coming to the CO bearing no. 38/RJT/2011 filed by the assessee for A.Y. 2005-06
21. At the outset, we note that there was a delay in filing the CO by the assessee for 365 days. It was explained by the Ld. AR that the delay has occurred due to oversight of the assessee as he keeps on travelling to Mumbai and Bangalore to look-after his properties and businesses. The Ld. AR in support of his contention drew our attention on the affidavit filed by the assessee. Accordingly the Ld. AR prayed before us to condone the delay and adjudicate the issue on merit.
22. On the other hand, the Ld. DR did not raise any objection on the condonation of the delay and left the issue at the discretion of the Bench.
23. Heard the rival contentions of both the parties and perused the materials available on record. Considering the nature/length of delay and the concession extended by the Ld. DR, we condone the delay in filing the appeal by the assessee and proceed to adjudicate the issue on merit.
23.1 The issue raised by the assessee is that foreign assets being stock and shares are not subject to tax as per the provisions of section 2(ea) of the W.T. Act.
23.2 The Ld. AR before us at the outset brought to our notice that the shares and securities are outside the ambit of the net wealth as per the revised definition of assets under section 2(ea) of the Act.
14W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 23.3 The Ld. AR for the assessee further submitted that this proposition was accepted by the CWT (Appeals) vide order dated 17th May, 2014 pertaining to the assessment years 1993-94 to 1998-99.
In view of the above the Ld. AR before us submitted that the shares and securities held in the trusts located outside India are not subject to wealth tax Act.
24. On the other hand, the Ld. DR has not brought anything on record contrary to the finding of the Ld. CIT (A). However, the Ld. DR supported the order of the AO.
25. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the impugned issue has already been decided in favour of the assessee by the Ld. CWT (A) in the own case of the assessee in the earlier years and there was no appeal preferred by the revenue to the higher forum. Thus, we infer that the order of the Ld. CWT (A) has reached to its finality. At the time of hearing, the Ld. DR has not brought anything on record contrary to the finding of the Ld. CIT (A).
25.1 We also note that as per the definition of section 2(ea) of the Act up to the assessment year 1992-93 includes the property of every kind except the properties specified in the definition. The relevant definition prior to the amendment is applicable to the assessment year 1992-93 stands as under:
15W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 "assets" includes property of every description, movable or immovable, but does not include, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXX
(i) animals ;
(ii) a right to any annuity [(not being an annuity purchased by the assessee or purchased by any other person in pursuance of a contract with the assessee)] in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lump sum grant ;
(iii) any interest in property where the interest is available to an assessee for a period not exceeding six years from the date the interest vests in the assessee :] [Provided that in relation to the assessment year commencing on the 1st day of April, 1981, [and the assessment year commencing on the 1st day of April, 1982], this sub-clause shall have effect subject to the modification that for item (i) thereof, the following item shall be substituted, namely :--
"(i)(a) agricultural land other than land comprised in any tea, coffee, rubber or cardamom plantation ;
(b) any building owned or occupied by a cultivator of, or receiver of rent or revenue out of, agricultural land other than land comprised in any tea, coffee, rubber or cardamom plantation :
Provided that the building is on or in the immediate vicinity of the land and is a building which the cultivator or the receiver of the rent or revenue by reason of his connection with the land requires as a dwelling-house or a store-house or an out-
house ;
(c) animals ;":] 25.2 However the above definition has been changed effective from the assessment year 1993-94 which provides the exhaustive list of assets subject to the provisions of wealth tax Act. The relevant definition after the amendment reads as under:16
W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 "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 [ten] 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, 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 ;
(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.17
W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 25.3 A perusal of the above definition reveals that the properties being shares and securities are not subject to wealth tax Act. Hence the ground raised by the assessee in the CO is allowed.
WTA No. 2/Rjt/2010 an appeal by the Revenue for A.Y. 2005-06 The Revenue has raised the following grounds of appeal:
1. The ld.CWT(A) erred in facts in laws in deleting addition of wealth of the U.S.A Trust valued at Rs.34,65,22,917/- and UK Trust valued at Rs.20,55,59,640/- as wealth in the hands of the assessee.
2. The ld.CWT(A) erred in facts and in laws in deleting action of valuing the flat at Bombay at Rs.31,12,491/- as against the value shown by the appellant at Rs.9825/- and directed to value as per Schedule III of the WT Act, relying upon the decision of ITAT, Rajkot Bench in appellant's own case.
3. The ld.CWT(A) erred in facts and in laws in directing to value the property known as Opera House, Bombay, as per Schedule III of the WT Act, relying upon the decision of ITAT, Rajkot Bench in appellant's own case.
4. The ld.CWT(A) erred in facts in laws in directing to re-workout the value of Jaimahal Palace Hotel & Stud Farm valued at Rs.44,96,29,324/- by the AO.
5. On legal and factual status of the case, the learned CWT(A) ought to have upheld the order of the Assessing Officer.
6. It is, therefore, prayed that the findings five in the order of the ld.CWT(A) may be dismissed/deleted and that of the Assessing Officer be restored.
7. Your appellant reserves the right to add, alter, withdrawn any/all grounds of appeal.
26. The 1st issue raised by the Revenue is that the Ld. CWT-A erred in deleting the wealth of the USA and UK trust amounting to Rs. 34,65,22,917 and Rs. 20,55,59,640/- respectively.
27. At the outset, we note that the identical issue has been decided by us in the WTA 01/RJT/2010 for A.Y. 2005-06 in favour of the assessee vide Paragraph No. 6 of this order. Please refer the relevant paragraph for 18 W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06 the detailed discussion. Accordingly and respectfully following the same, we do not want to deviate from the said order.
27.1 We are also conscious to the fact that the settler of the trust has already died in the year 1969. Therefore, there is reason to make any addition in the hands of such person on protective basis. In case any addition needs to be made on protective basis, then the same can be made either in the hands of the beneficiary or trustee. But, the same cannot be made in the hands of the settler as made by the AO. Moreover, the impugned issue has already been settled by the ITAT in the own case of the assessee in WTA No. 30 to 33/RJT/2001 pertaining to the assessment years 1986-87 to 1989-90 vide order dated 20th June 2003. Hence the ground of appeal of the Revenue is dismissed.
28. The 2nd issue raised by the revenue is that the Ld. CWT (A) erred in deleting the addition made by the AO for Rs. 31,12,491/- while computing the net wealth of the assessee.
29. At the outset, we note that the identical issue has been decided by us in the WTA 01/RJT/2010 for A.Y. 2005-06 in favour of the assessee vide Paragraph No. 11 of this order. Please refer the relevant paragraph for the detailed discussion. Accordingly and respectfully following the same, we do not want to deviate from the said order. Hence the ground of appeal of the Revenue is dismissed.
19W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06
30. The 3rd issue raised by the Revenue is that the Ld. CWT (A) erred in directing to the AO to value the property being opera house at Bombay according to schedule-III of the W.T. Act.
31. At the outset, we note that the identical issue has been decided by us in the WTA 01/RJT/2010 for A.Y.2005-06 in favour of the assessee vide Paragraph No. 16 of this order. Please refer the relevant paragraph for the detailed discussion. Accordingly and respectfully following the same, we do not want to deviate from the said order. Hence the ground of appeal of the Revenue is dismissed.
32. The next issue raised by the Revenue is that the Ld. CWT-A erred in directing to rework-out the value of Jaimahal Palace Hotel & Stud Farm which was valued by the AO at Rs. 44,96,29,324.00.
33. At the outset, we note that the identical issue has been decided by us in the WTA 01/RJT/2010 for A.Y.2005-06 in favour of the assessee in part vide Paragraph No. 20 of this order. Please refer the relevant paragraph for the detailed discussion. Accordingly and respectfully following the same, we do not want to deviate from the said order. Hence the ground of appeal of the Revenue is dismissed.
In the result, the appeal of the Revenue is dismissed.
20W.T.ANos.01-02/RJT/2010 With C.O.No.38/Rjt/2011 A.Y.2005-06
34. In the combined result, both the appeals of the Revenue are dismissed and the CO of the assessee is allowed.
This Order pronounced in Open Court on 25 /10/2019
Sd/- Sd/-
(राजपाल यादव) (वसीम अहमद)
या यक सद य लेखा सद य
(RAJPAL YADAV) (WASEEM AHMED)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated 25 /10/2019
manish /TC Nair
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ# / The Appellant
2. $%यथ# / The Respondent.
3. संबं धत आयकर आयु:त / Concerned CIT
4. आयकर आय:
ु त(अपील) / The CIT(A)- II, Rajkot
5. ;वभागीय $ त न ध, आयकर अपील य अ धकरण,राजोकट/DR,ITAT, Rajkot
6. गाड? फाईल / Guard file.
आदे शानुसार/ BY ORDER, स%या;पत $ त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील'य अ(धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation 25/09/2019. word processed by Hon'ble AM in his computer by dragon
2. Date on which the typed draft is placed before the Dictating Member ...24.10.2019
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S....... 25/10/2019
7. Date on which the file goes to the Bench Clerk 25/10/2019
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order...............