Law:

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Section 2(ea) of the Wealth-tax Act, 1957 - Assets - Assessment years 1997-98 and 1998-99 - Whether a commercial asset used by an assessee in business of letting out properties can be treated as an 'asset' for purpose of wealth-tax - Held, no JUDGMENT N. Kumar, J. - These two appeals are by the revenue challenging the orders passed by the appellate authorities holding that the value of the asset owned and used by the assessee-company in M.G. Road, Bangalore, is excluded from the purview of levying of wealth tax. These two appeals arise because of the two assessment orders pertaining to assessment years 1997-98 and 1998-99. The assessee is a limited company and has a leasehold property situated in M.G. Road, Bangalore. It has developed the said property into a commercial complex and deriving rental income therefrom. The asset in question is a business asset and is exploited for commercial purposes. The assessee claimed exemption from wealth tax under section 2(ea) of Wealth-tax Act, 1957 (hereinafter referred to as 'the Act' for short) for the assessment years 1997-98 and 1998-99. For the assessment years 1984-85 to 1992-93, the said benefit was granted to the assessee. It is because, as per the law stood then, commercial building was not subjected to wealth tax. However, the Wealth-tax Act was amended by the Finance (No. 2) Act, 1996, which came into effect from 1-4-1997 bringing within the fold of the Act any building or land appurtenant thereto used for commercial purposes. Therefore, in view of the change in the law, the request of the assessee was rejected for those two years. Aggrieved by the same, the assessee preferred an appeal. The first Appellate Authority, accepting the contention of the assessee, held that as the assessee is in the business of letting out properties and though the asset in question is a commercial building, it is excluded from the definition of the word ' asset' as is clear from the Circular issued by the Board of Revenue. Aggrieved by the said order, the revenue preferred appeals. The Tribunal also affirmed the said issue and dismissed the appeals. Therefore, the revenue has filed these appeals before this Court. 2. At the time of…

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