Commissioner Of Wealth-Tax vs Prem Nath Motors Pvt. Ltd.
1998 Latest Caselaw 648 Del

JUDGMENT

R.C. Lahoti, J.

1. This is a petition under Section 27(3) of the Wealth-tax Act, 1957, arising out of the assessment year 1987-88 whereby the Revenue seeks a mandamus to the Tribunal for drawing up a statement of case and referring the following question for the opinion of the High Court:

"Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was correct in law in holding that the investment of Rs. 14,91,874/- in an incomplete and unfinished factory building is not liable to be included in the wealth of the assessee-company?"

2. The questions calls for interpretation of Section 40 of the Finance Act, 1983. The assessee was constructing a building. The value of investment made therein was sought to be included in the assessable wealth of the assessee. Section 40(3)(vi) which is relevant for our purpose reads as under:

"(3) The assets referred to in Sub-section (2) shall be following, namely:

(vi) building of 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, restroom or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part."

3. To attract the applicability of the above said clause the building or part thereof must be capable of being used by the assessee. The facts as found and the question itself suggest that the investment was in an incomplete and unfinished factory building, the construction whereof was still in progress. It is not the case of the Revenue that the building or part thereof as it stood in the relevant assessment year was capable of being subjected to any use by the assessee. Obviously, the building or part thereof not covered by Clause (vi), above said. The answer to the question is obvious. The Tribunal did not err in refusing to make a reference to the High Court. The petition under Section 27(3) of the Wealth-tax Act, is without any merit and is therefore dismissed.