Law: Wealth Tax Act, (XV of 1963)

Section: 2(1)(5)(ii),3,16(2),17,16(3),14,2(24),11

Law: Wealth Tax Rules, 1963

Section: 8(3)

Wealth Tax Act (XV of 1963)--- ----Ss. 2(1)(5)(ii), 3, 16(2) & 17---Wealth Tax Rules, 1963, R.8(3)---Assets---Assessee, a company deriving income from running a Textile Mill/lease income---Mill was leased out and lease income was declared---Wealth tax was charged under the provisions of S.2(5)(ii) of the Wealth Tax Act, 1963 on the ground that the assessee himself assigned the purpose of his immovable property held for the purpose of letting out in the Memoranduiri and Articles of Association---Validity---Memorandum and Articles of Association of the assessee company contained undoubtedly a specific sub-clause regarding the objects and purposes of the assessee company wherein to lease, let out, hire, mortgage etc. were among the objects, but this object was one among more than 37 objects, which had to be adjudged in its totality, which were in fact "to erect, establish and work weaving, spinning, embroidery, bleaching sizing, dyeing, printing, twisting, calendering, and finishing for the manufacture of all kinds of cotton, woollen, silk linen, art silk, rayon, and mixed textile and articles---Legislature had never intended to impose wealth tax on leased out industrial/commercial units---Even if, in one of the object clauses, the object of the company had been mentioned as the purposes of the company as to lease, let out etc. that clause was not conclusive and was of general nature, as the purpose had been defined as the ultimate use of the company, which had never been said to be let out or to lease---Assessee had not held the immovable property for the purpose of letting out, or business of letting out, but the purpose of the assessee company as was evident from its title was the textile and general mills---First Appellate Authority had rightly cancelled the order---Order of the First Appellate Authority was upheld and the appeal tiled by the Department was dismissed by the Appellate Tribunal. (2004) 89 Tax 234 (Trib.) rel. 2002 PTD (Trib.) 2370; (1997) 76 Tax (SC Pak.); 1990 PTD (Trib.) 671; 2006 PTD 406; 2006 PTD (Trib.) 5 and W.T.As. Nos.191 to 195/LB of 2003, dated 18-1-2005 ref. 2000 PTD (Trib.) 1826 per incurrium. ORDER Through this appeal, the…

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