Law: Wealth Tax Act, (XV of 1963)

Section: 2(5)(ii),2(e)(ii)

Law: Income Tax Ordinance, 1979

Section: 19,30

Wealth Tax Act (XV of 1963)--- ----Ss. 2(5)(ii) & 2(e)(ii)----Assets---Assessee was a private limited company, running a business of Flour Mills which was leased out---Wealth tax was charged on the Flour Mills, being !eased out, to the hands of assessee on the ground that mill was an asset in term of S.2(5)(ii) of the Wealth Tax Act, 1963 and was held for the purpose of letting out ---Assessee contended that i1 has only leased out the machinery and plant of the mill and the leased income-was being assessed under S.30 of the Income Tax Ordinance., 1979 and not under S.19 of the Income Tax Ordinance, 1979 and that leasing of the flour mill was a leasing out of the movable property alongwith the immovable property (building/land) and hence, it was outside the purview of S.2(5)(ii) of the Wealth Tax Act, 1963 and was, thus, not assessable assets under the Wealth Tax Act, 1963 that original purpose of the company was to itself run a flour mill and it had been doing it but after that due to abnormal circumstances the company had to lease out the flour mill, therefore, the property could not be assessed under the Wealth Tax Act, 1963 as it had not been held for the business of letting and that assessee, at any time, might occupy, the mill for purposes of its own business ---Assessee also objected that "paid-up capital" was a liability of the company as it was payable to its Directors, which was a debt owed and was deductible from the wealth of the assessee-company---Validity--- Machinery and the plant of the flour mill embedded in the earth or attached to it was so embedded for the permanent beneficial enjoyment of that to which it was attached, and was installed in the building for the purposes of flour mill, was an immovable property terms 'of S.2(5).(ii) of the Wealth Tax Act, 1963---Article and Memorandum of the assessee, clearly showed that one of the objects was to lease out or let out the flour mill, therefore, it was being held for the purpose of business 'of letting out---Thus, same was an asset in terms of S.2(5)(ii) of the Wealth Tax Act, 1963 and was chargeable to Wealth Tax Act, 1963---In case of winding up of a company its Directors/shareholders were…

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