Law: Wealth Tax Act, (XV of 1963)

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

[WEALTH TAX ACT, 1963 (XV OF 1963)],,,Section (2)(e) (ii),,,,.The machinery and plant of the flour mills embedded in the earth or attached to it is so embedded for the permanent beneficial enjoyment of that to which it is attached, and is installed in the building for the purposes of flour mills, is an immovable asset. The flour mills along with the building and machinery, leased out to a third party is immovable property and is an asset being held for the purpose of business of letting out in terms of section 2(e) and is chargeable to wealth tax under the Wealth Tax Act, 1963.--The appellant owns a flour mills which was leased out to a third party. Assessing Officer was of the view that the flour mills was an asset in terms of section 2(e)(ii) of the Wealth Tax Act, 1963 and is held for the purpose of letting out, and therefore is chargeable to wealth tax assessment made by confirmed in appeal by learned CIT(A). Immovable or movable property has not been defined is the Act. It has been defined in the General Clauses Act, 1897, as under; "Immovable properly", shall include land, benefits to arise out of the land, and things attached to the earth or permanently fastened to anything attached to the earth." Movable property shall mean property of every description except immovable property." The definitions of immovable property do not tell us what "immovable property" is. They only tell us what is either included or not included therein. A thing is embedded in the earth or attached to what is so embedded for the permanent beneficial enjoyment of that in which it is attached is "immovable property". The superior Courts have laid down two tests for deciding as to the character of the property when fixture are annexed to land, namely. (l) the degree or mode of annexation, and (2) the object or annexation. The second, which is the more important of the two, involves the consideration of the particular circumstances of each case. It follows that if a thing embedded in the earth or attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached then it is a part of the immovable property. In View of what has been stated above, we…

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