High Court Of Madras
South India Structural Corporation Ltd. vs. Deputy Commissioner Of Wealth Tax, Co. Circle I(3), Chennai
Section : 3
R. Sudhakar And R. Karuppiah, JJ.
T.C.A. No. 1236 Of 2005
March 10, 2015
JUDGMENT
R. Sudhakar, J. – Aggrieved by the order passed by the Income Tax Appellate Tribunal in allowing the appeal filed by the Revenue, the appellant/assessee is before this Court by filing the present appeal. This Court, vide order dated 28.11.05, while admitting the appeal, framed the following substantial questions of law for consideration :—
“(i) Whether the Tribunal is correct in concluding that the value of the lease hold right in the property under consideration was correctly brought into the computation of net wealth as per provisions of Section 40 of the Finance Act, 1983 for the assessment year under consideration?
(ii) Whether the Tribunal is correct in concluding that assessibility of the said right in the property under consideration at Rs.82 Lakhs in the computation of net wealth even though rights in the property had vested with Central Bank of India in terms of sub-lease agreement?”
2. The facts, in a nutshell, are as hereunder :—
The assessee entered into a lease agreement for a period of 99 years with M/s. Institute of Public Enterprises & Public Administration and in the said land, assessee constructed a building and sub-leased the said building to Central Bank of India and received a certain amount as advance rent. The assessee did not show the building, that was let out to Central Bank of India, in the taxable wealth. Before the Assessing Officer, the assessee, however, claimed that the lease holding right in the land and building is not liable for wealth tax assessment. However, the said stand of the assessee was negatived by the Assessing Officer and, accordingly, the assessee was assessed to wealth tax. Aggrieved against such assessment, the assessee challenged the same before the CIT (Appeals), who held in favour of the assessee, against which the Department preferred appeal to the Tribunal.
3. The Tribunal, however, reversed the finding of the CIT (Appeals) and held in favour of the Department holding that 99 years lease is equal to ownership of the land. The Tribunal further held that leasehold right is an interest in an immovable property, which has a value and the receipt of rent from Central Bank of India is in the nature of owner of land. The Tribunal further held that since the assessee is receiving rental income, the assessee cannot plead that he is not occupying the landed property. The Tribunal further held that occupation of Central Bank of India on the leased premises is deemed to be constructive occupation of the assessee. Further the assessee has not treated the land and building as commercial asset and, therefore, it held that the Department was right in including it under the taxable wealth of the assessee. Further, the Tribunal also accepted the value of the land and building at Rs.82 Lakhs, which is the value of the building alone, which was found to be reasonable by the Tribunal. Accordingly, the Tribunal held in favour of the Department by reversing the finding of the CIT (Appeals). Against the said order of the Tribunal, the assessee has filed the present appeal.
4. Heard Mr. Sridhar, learned counsel appearing for the appellant/assessee and Ms. Hema Muralikrishnan, learned standing counsel appearing for the respondent/Department and perused the materials available on record.
5. The issue that is raised before this Court could be easily understood if the provisions of Section 40 of the Finance Act, 1983, more particularly Sections 40(1) and (3), are looked into. For better clarity, Section 40 is extracted hereinbelow :—
“40. Revival of levy of wealth-tax in the case of closely-held companies.—
(1) Notwithstanding anything contained in section 13 of the Finance Act, 1960 (13 of 1960), relating to exemption of companies from levy of wealth-tax under the Wealth-tax Act, 1957 (27 of 1957) (hereinafter referred to as the Wealth-tax Act), wealth-tax shall be charged under the Wealth-tax Act for every assessment year commencing on and from the 1st day of April, 1984, in respect of the net wealth on the corresponding valuation date of every company, not being a company in which the public are substantially interested, at the rate of two per cent. of such net wealth.
Explanation. – For the purposes of this sub-section, “company in which the public are substantially interested ” shall have the meaning assigned to it in clause (18) of section 2 of the Income-tax Act.
(2) For the purposes of sub-section (1), the net wealth of a company shall be the amount by which the aggregate value of all the assets referred to in sub-section (3), wherever located, belonging to the company on the valuation date is in excess of the aggregate value of all the debts owed by the company on the valuation date which are secured on, or which have been incurred in relation to, the said assets :
Provided that where any debt secured on any assets belonging to the assessee is incurred for, or ensure to, the benefit of any other person, or is not represented by any asset belonging to the assessee, the value of such debt shall not be taken into account in computing the net wealth of the assessee.
(3) The assets referred to in sub-section (2) shall be the following, namely :
(i) gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals ;
(ii) precious or semi-precious stones whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel ;
(iii) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel ;
(iv) utensils made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals ;
(v) land other than agricultural land ;
(vi) building or land appurtenant thereto, other than building or part thereof used by the assessee as factory, godown, warehouse, hotel or office for the purposes of its business or as residential accommodation for its employees or as a hospital, creche, school, canteen, library, recreational centre, shelter, rest room or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part :” (Emphasis Supplied)
6. The provisions of Section 40 of the Finance Act, 1983, provides that wealth tax should be charged under the Wealth Tax Act in respect of any wealth on the corresponding valuation date of every company at the rate specified. For the purposes of sub-section (1), the net wealth of the company shall be the amount by which the aggregate value of all the assets referred to in sub-section (3), wherever located, belonging to the company on the valuation date is in excess of the aggregate value of all the debts owed by the company on the valuation date which are secured on, or which have been incurred in relation to the said assets.
7. The net wealth is to be determined on the basis of assets referred to in sub-section (3), subject to exemption or exceptions, as the case may be. In this case, Section 40(3)(vi) clearly provides that the net wealth will include building or land appurtenant thereto, to be part of the net wealth. The exceptions mentioned therein are “other than building or part thereof, used by the assessee for factory, godown, warehouse, hotel or office for the purposes of its business or as residential accommodation for its employees or as a hospital, creche, school, canteen, library, recreational centre, shelter, rest room or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part.
8. From the above, it is clear that none of the exceptions as enumerated in Section 40(3)(vi) are attracted to the facts of the present case. In the present case, the building has been leased out to Central Bank of India for which rent is being collected by the assessee/appellant. It therefore follows that by virtue of Section 40(1) read with Sections 40(2) and (3) of the Act, the building constructed by the appellant would fall within the definition of specified asset for the purpose of determining the net wealth of the assessee liable to wealth tax. It is of no avail on the part of the assessee to plead that a commercial activity conducted in the premises would fall outside the purview of wealth tax, because, as stated above, the assessee in this case does not fall within any of the exceptions provided under Section 40(3)(vi) for availing the benefit. Such being the case, the building as such, constructed on a leasehold property, would be termed as an asset in terms of Section 40(3) and, therefore, the net wealth of the company has to be determined in terms of Section 40(2) of the Act for the purpose of levy of wealth tax under Section 40(1).
9. The above view of this Court is further fortified by the Full Bench decision of this Court in CWT v. Fagun Co. (P.) Ltd. [2006] 286 ITR 297/157 Taxman 149, wherein on a reference, the Full Bench, answered the same as under :—
“15. Unless and until the assets are used by the assessee as factory, godown, warehouse, hotel or office, the assessee cannot claim exemption under the provision. These specified assets alone are excluded from taxation. The assets other than the specified assets in the exclusionary clause, are not entitled for exemption. The assessee, in this case, let out a portion of the building to various tenants. The let out portions are not coming under any of the specified assets mentioned earlier. The business of the assessee is leasing out the assets and hence the assets are commercial one. Even though the assets used are commercial assets, still the assessee is not entitled to exemption unless the assets come within the specified assets mentioned in the said clause (vi) of sub-section (3) of section 40 of the Finance Act. It is noted that Parliament has clearly specified the assets which are excluded under the said clause. All the commercial assets are not exempt from the purview of the Wealth-tax Act. If the intention is to exclude all the commercial assets, the wording in the provision would be different. Parliament need not enumerate various assets for exclusion. If they want to exclude commercial assets from the purview of the Wealth-tax Act, the section would be that all commercial assets used for the purpose of the business are exempt or excluded from wealth-tax. Instead of using the same, they have only picked and chosen the specified assets for the purpose of excluding from wealth-tax. So, the intention of Parliament is also very clear to exclude only particular types of buildings used as factory, godown, warehouse, hotel or office and also residential accommodation for its employees, buildings or part thereof used as a hospital, creche, school, canteen, library, recreational centre, shelter, rest room or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part. Clause (vi) of sub-section (3) of section 40 is very plain, clear, unambiguous and it is also specific. When the statute is plain, clear, unambiguous and specific, it is not necessary to rely on the Statement of Objects and Reasons or refer to the speech made by the Finance Minister. The argument of learned counsel for the Revenue relying on the Finance Minister’s speech for the purpose of introducing the impugned provision is not relevant, as the impugned provision is plain, clear, unambiguous and specific. The Statement of Objects and Reasons should be used only for limited purposes and cannot be used to construe the provisions of the statute. When the words in the statute are clear, it is not open to the courts to fall back upon the Statement of Objects and Reasons and to construe the provisions of the Act in the light of the Statement of Objects and Reasons. The Supreme Court judgment reported in State of Haryana v. Chanan Mal AIR 1976 SC 1654, held that the Statement of Objects and Reasons cannot control the plain and obvious meaning which the sections, obviously convey; it cannot be referred to as an aid to interpretation when the language of the operative provisions of the Act is clear and unambiguous. The Supreme Court judgment reported in P.V. Narasimha Rao v. State (CBI/SPE) AIR 1998 SC 2120, held that the speech of the Minister should not be looked into, except for the limited purpose of ascertaining the mischief which the Act seeks to remedy. Normally, the courts will not rely on the statement of the minister or explanatory notes on the clauses of a Bill for construing the provision except in cases where the language is vague, capable of different interpretations. When the statute is ambiguous, uncertain, clouded or has more than one meaning, the external lights if any, which the statute was intended to remedy or of the circumstances that led to the passing of the statute may be looked into for the purposes of ascertaining the object which the Legislature had in view in using the words in question. A statutory provision must be construed, if possible, to see that absurdity and mischief should be avoided. Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the Legislature, the may modify the language used by the Legislature or even do some violence to it, so as to achieve the obvious intention of the Legislature and produce a rational construction. The court can rely on the speech made by the mover of the Bill explaining the reason for its introduction for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted. When the statute is plain, clear, unambiguous and specific, the argument of the counsel for the assessee, to resort to any interpretative process to unfold the legislative intent, becomes impermissible. The need for relying on external aids arises only if the statute is ambivalent. The court will not refer to the intention of the Legislature, debate in Parliament, speech of the Finance Minister and notes on clauses, if the statute is plain, clear, unambiguous and specific. Recently, the Supreme Court in the case of K.P. Sudhakaran v. State of Kerala reported in [2006] 5 SCC 386, held that the alleged intention behind a provision could not be used to defeat the express words of the provision. Once a statutory rule is made without providing any exceptions, no exceptions can be carved out to such rule by judicial interpretation. All that the court has to see at the very outset is what does that provision to say. If the statute is clear, plain, specific and unambiguous, the court need not call into aid the other rules of construction of statutes. We are of the view that section 40(3)(vi) of the Finance Act, is plain, clear, unambiguous and specific and hence referring to the Finance Minister’s speech in introducing the provision is not relevant for the purpose of interpretation. Hence, the argument of counsel for the assessee is rejected.
16. It is useful to refer to this court judgment reported in CWT v. Asoka Betelnut Co. (P.) Ltd. [2003] 260 ITR 573, wherein it was held that unless the business assets fall within the exclusionary clause of section 40(3)(vi) of the Finance Act, 1983, the business assets would be liable to be taxed under the Wealth-tax Act, 1957. In that case, there was a claim that the building owned by it was not eligible to wealth-tax under section 40 of the Finance Act, 1983. So, the main argument advanced by the assessee was that the shopping complex was a commercial asset and the assessee was exploiting the commercial asset by letting it out. Hence, the property used should be considered to be used in the assessee’s business and therefore it was not liable for levy under the wealth-tax. The court rejected the contention and held that section 40 of the Finance Act, 1983 covers not only unproductive assets like gold, silver, platinum, stones, ornaments, utensils but also other properties like land and the building appurtenant thereto and motor cars. Hence, the commercial complex owned by the assessee, namely, building with the land appurtenant thereto, fell within clause (vi) of sub-section (3) of section 40 of the Finance Act, 1983 and it did not fall within any of the excluded items mentioned in section 40(3)(vi) of the Finance Act. Therefore, it was held that the assessee was liable to be taxed on the value of the commercial complex under section 40(3). Merely because the assets are commercial assets, it does not mean that the assets are exempt from wealth-tax. The view expressed by the above judgment is in accordance with law and we fully agree with the said judgment. It is also held in the said judgment as follows (page 578) :
“The next question that arises is whether the assessee is entitled to the exemption in view of the exclusionary clause found in section 40(3)(vi) of the Finance Act, 1983. Section 40(3)(vi) while including the building and the land appurtenant thereto for levy of wealth-tax, excludes certain items of assets listed in the sub-section. In other words, certain specific items of assets are excluded from the scope of levy of wealth-tax and the assets so excluded are factory, godown, warehouse, hotel or office used for the purposes of its business. The commercial complex owned by the assessee is not one of the excluded items mentioned in clause (vi) of sub-section (3) of section 40 of the Finance Act. The latter part of the same clause only deals with the building let out to employees and it has no application. The submission of learned counsel for the assessee that all buildings used for the purpose of the business are exempt is not acceptable and the acceptance of the said submission would mean that the expression in section 40(3)(vi) of the Finance Act, factory, godown, warehouse, hotel or office used for the purpose of business would become redundant. Hence, the primary condition for the assessee to claim that certain assets are excluded from levy of tax is that the assets must be the building and the land appurtenant thereto and it should be a factory or a godown or warehouse, hotel or office used for the purpose of the business. The commercial complex of the assessee does not fall within any of the excluded items mentioned in section 40(3) of the Finance Act, 1983. We are of the view that since the case of the assessee does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the Finance Act, 1983, the assessee is liable to be taxed on the value of the commercial complex under section 40(3) of the Finance Act, 1983.”
17. Learned counsel appearing for the assessee relied on the Bombay High Court judgment reported in CWT v. Cema (P.) Ltd. [2001] 248 ITR 629, wherein it was held as follows: (page 629) :
“The Tribunal, on facts, came to the conclusion that the abovementioned office premises was a business asset not liable to wealth tax. That, merely because the said office premises have been leased out for five years, did not change the commercial character of the said asset. Apart from the order of the Tribunal which is passed, on facts, we ourselves examined the returns filed by the assessee right from the assessment year 1985-86 which clearly indicate that even under the Income-tax Act, the assessee has been given the benefit of depreciation and the income received by the assessee has been treated as income from business. Taking into account the above facts and circumstances of the case, we are of the view that a pure finding of fact has been recorded by the Tribunal. Hence, no interference is called for. Appeal dismissed.”
18. With great respect, we are unable to agree with the view of the Bombay High Court judgment cited supra. They have not considered the scope of section 40 of the Finance Act, 1983. The reasons given in the said Bombay High Court judgment that the assets are not includible in the net wealth of the assessee are :
(a) It is a commercial asset.
(b) The assessee was given the benefit of depreciation.
(c) Income received by the assessee by letting out of the commercial asset had been treated as income from business.
19. The above reasons are not at all relevant for wealth-tax purposes. The computation under the income-tax and the wealth-tax are different. Under the Income-tax Act, there are five heads of income and the income has to be computed on the basis of the heads of income. While computing the income, there are various exemptions and deductions provided under the Income-tax Act, and also for the purpose of claiming deduction or exemption, there are various conditions stipulated and the Assessing Officer has to consider the provision of the Act and allow deduction. As far as the wealth-tax is concerned, what are all the assets chargeable under the Wealth-tax Act, will be taken into consideration and if any asset is exempt as per the provisions, the same is exempted. The income-tax computation has no basis in computing the wealth of the assessee. In our opinion, the criteria mentioned in the Bombay High Court judgment is not at all relevant for the purpose of excluding from wealth-tax, unless the assets come within the exclusionary clause as contemplated under section 40(3)(vi) of the Finance Act and hence, even though the let out portion is a commercial asset, it is not exempt because the same is not coming within the scope of exclusionary clause contemplated under section 40(3)(vi) of the Finance Act. Hence, we are unable to agree with the view of the Bombay High Court judgment cited supra.
20. In the case of CIT v. Shaan Finance (P.) Ltd. reported in [1998] 231 ITR 308, the Apex Court held as follows (page 312):
“We have already set out the three requirements of section 32A(1) which entitle an assessee to claim investment allowance. One of the requirements is that the machinery must be wholly used for the purpose of such assessee’s business. When the business of the assessee is leasing of such machines, the machines so leased out are being used for the purpose of the assessee’s business. The income by way of hire charges which the assessee receives is also taxed as business income of the assessee.”
21. The above judgment considered the scope of section 32A of the Income-tax Act and held that the assessee is entitled to the investment allowance on plant and machinery let out to the third parties. Further it was held that the let out plant and machinery, were used in the business of leasing. Hence, the Apex Court granted investment allowance under section 32A of the Income-tax Act. In the present case, the articles of association indicate the main object, which is extracted hereunder :
“2. To acquire by purchase, lease, exchange or otherwise farms, lands, buildings and hereditaments of any tenure of description and any estate or interest therein, and any rights over or connected with lands so situated and to turn the same to account as many seem expedient and in particular by preparing building sites and by constructing, reconstructing, altering, improving, decorating, furnishing and maintaining offices, flats, houses, hotels, restaurants, shops, factories, warehouses, wharves buildings works and conveniences of all kinds and by consolidating or connecting or sub-dividing properties and by leasing and disposing of the same.”
22. From the object, it is clear that the assessee is carrying on leasing business. No doubt the assets are used in the leasing business. Section 40 of the Finance Act levies tax on the assets as enumerated under the provision and only the assets that are excluded under the exclusionary clause alone will be entitled to the exemption. If the leasing company let out factory, building or warehouse as stated in the exclusionary clause, the assessee is certainly entitled to the relief. All the leased assets are not entitled to exemption unless the same come under any of the specified assets, for example, if the assessee lets out the specified assets like factory, godown or warehouse in the leasing business, certainly it will come within the exclusionary clause. It is useful to refer to the Madras High Court judgment in the case of CWT v. Indian Warehousing Industries Ltd. reported in [2004] 269 ITR 203, which held as follows (page 207) :
“The Supreme Court in the said case had observed that a leasing company which owns machinery and leases such machinery to third parties for manufacture of articles is entitled to investment allowance of such machinery under section 32A of the Income-tax Act. Even though at the first glance such decision appears to support the contention of the assessee, but on deeper scrutiny, we are of the view that the ratio of the said decision is not applicable to the present case. To attract the provisions under section 32A, as observed by the Supreme Court, the assessee must satisfy the following conditions (page 312 of 231 ITR) :
‘(1) the machinery should be owned by the assessee ;
(2) it should be wholly used for the purposes of the business carried on by the assessee ; and
(3) the machinery must come under any of the categories specified in sub-section (2) of section 32A.’
The relevant provision in section 32A is to the effect that the machinery should be wholly used for the purpose of the business carried on by the assessee. Even though it can be said that leasing out of godowns was for the purpose of carrying out of the business by the assessee in the present case, as per section 40(3)(vi) there is an additional requirement that the building should be used by the assessee as godown or warehouse for the purpose of its business. The nature of use by the assessee as godown or warehouse is an important aspect. There is no such similar provision contained in section 32A of the Income-tax Act. The ratio of the Supreme Court is, therefore, inapplicable to the present case.”
23. In the Wealth-tax Act, in computing the net wealth of the assessee, all commercial assets as per the provision of section 40 of the Finance Act are taxable and only particular assets as specified in the exclusionary clause alone are exempt from taxation. If the leasing companies let out the factory, warehouse or godown, the same is exempt from taxation. The Supreme Court judgment in the case of CIT v. Shaan Finance (P.) Ltd. [1998] 231 ITR 308, held that the assessee is entitled to investment allowance under section 32A of the Income-tax Act on the ground that the let out plant and machinery were used for the purpose of the leasing business and the income derived from leasing out, was assessed under the head “Income from business”. As the conditions enumerated in section 32A of the Income-tax Act were satisfied, the Supreme Court granted investment allowance. Section 32A of the Income-tax Act reads as follows :
“32A.(1) In respect of a ship or an aircraft or machinery or plant specified in sub-section (2), which is owned by the assessee and is wholly used for the purposes of the business carried on by him, there shall, in accordance with and subject to the provisions of this section, be allowed a deduction, in respect of the previous year in which the ship or aircraft was acquired or the machinery or plant was installed or, if the ship, aircraft, machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year, of a sum by way of investment allowance, equal to twenty-five per cent. of the actual cost of the ship, aircraft, machinery or plant to the assessee :”
24. In the Finance Act, the relevant provision in section 40(3), reads as follows :
“(vi) building or land appurtenant thereto, other than building or part thereof used by the assessee as factory, godown, warehouse, hotel or office for the purposes of its business or as residential accommodation for its employees or as a hospital, creche, school, canteen, library, recreational centre, shelter, rest room or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part :
Provided that each such employee is an employee whose income (exclusive of the value of all benefits or amenities not provided for by way of monetary payment) chargeable under the head ‘Salaries’ under the Income- tax Act, does not exceed eighteen thousand rupees ;”
25. In both the provisions, one of the conditions to be satisfied by the assessee is that, the assets must be used in the assessee’s business. There is no dispute in the present case that the let out assets are used in the leasing business. That alone is not sufficient to claim exemption from the Wealth-tax Act. The yardstick of the Income-tax Act cannot be applied in the present case for the purpose of exemption under the Wealth-tax Act. The exemptions or exclusionary clause are different from granting deduction or allowance under the Income-tax Act. Not all the business assets used in the business are exempt from the purview of the wealth-tax. Once the let out assets come within the specified clause as contemplated under section 40(3)(vi) of the Finance Act, the assessee is certainly entitled to exemption from the Wealth-tax Act. The Division Bench judgment of this court reported in CWT v. Indian Warehousing Industries Ltd. [2004] 269 ITR 203 (Mad), following the principles enunciated by this court judgment reported in K.N. Chari Rubber and Plastics (P.) Ltd. v. CWT [2003] 260 ITR 164, held that, as per section 40(3)(vi) of the Finance Act, there is an additional requirement that the building should be used by the assessee as godown or warehouse for the purpose of its business. We are of the view that the let out assets are used by the assessee in its leasing business. If the leased out assets such as, godown, warehouse, hospital or other assets, come within the specified assets in section 40(3)(vi) of the Finance Act, certainly the assessee is entitled to the exemption, because the same is used in leasing business. The view of the Division Bench judgment that the leased assets are not used for the purposes of business, is contrary to the Supreme Court judgment cited supra. Hence, we are unable to agree with the Division Bench judgments reported in K.N. Chari Rubber and Plastics (P.) Ltd. v. CWT [2003] 260 ITR 164 (Mad.) and CWT v. Indian Warehousing Industries Ltd. [2004] 269 ITR 203 (Mad.). In the present case, the let out portions are not coming in any of the specified assets. Hence, the earlier judgment reported in CWT v. Fagun Estates (P.) Ltd. [2005] 272 ITR 472 (Mad.) is correctly decided. The remaining judgments relied on by learned standing counsel for the Revenue are not relevant to the facts of the present case and hence we are not referring to the same. Hence, we are of the view that since the case of the assessee does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the Finance Act, 1983, the assessee is liable to be taxed on the value of the tenanted portion of the building under section 40 of the Finance Act, 1983.”
10. In the case on hand, the assessee/appellant herein has leased out the property to the lessee for running banking business, which is not the business activity of the assessee/appellant. Therefore, as held by the Full Bench, assessee/appellant does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the Finance Act, 1983, and, thereby, the assessee is liable to be taxed on the value of the tenanted portion of the building under Section 40 of the Finance Act, 1983. The abovesaid Full Bench decision is squarely applicable to the facts of the present case. Accordingly, following the Full Bench decision in Fagun Co. (P.) Lts.’s case (supra), the 1st substantial question of law is answered against the assessee/appellant and in favour of the Revenue/respondent.
11. The 2nd substantial question of law that has been admitted also deserves to be answered against the assessee, as the department has taken into consideration the value of the building alone, constructed by the assessee, for the purpose of computation of the net wealth and not the value of the land. However, in the order it has been stated that for the purpose of computation of the value for land and building, the value of the building alone is taken as a composite value. However, no appeal has been filed by the Department challenging that portion of the order of the Tribunal. In such circumstances, this Court is of the considered opinion that the value adopted by the Tribunal at Rs.82 Lakhs for the purpose of computation of net wealth is just and proper and calls for no interference, as the value of the building alone is taken as composite value for the purpose of computation of the value of the land and building. Accordingly, in view of the above, the 2nd substantial question of law is also answered against the assessee/appellant and in favour of the Revenue/respondent.
12. In the result, the appeal fails and the same is dismissed confirming the order passed by the Income Tax Appellate Tribunal. However, in the circumstances of the case, there shall be no order as to costs.
[Citation : 375 ITR 445]
