Delhi High Court
Commissioner Of Wealth Tax vs Sohna Forge Pvt. Ltd. on 18 July, 2011
Author: A.K.Sikri
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.T.A. No.1 of 2010
W.T.A. No.2 of 2010
W.T.A. No.3 of 2010
W.T.A. No.4 of 2010
W.T.A. No.5 of 2010
W.T.A. No.6 of 2010
% ORDER DELIVERED ON: 18th July, 2011
+ W.T.A. No.1 of 2010
COMMISSIONER OF WEALTH TAX . . . APPELLANT
through : Mr. Sanjeev Rajpal, Standing
Counsel.
VERSUS
SOHNA FORGE PVT. LTD. . . .RESPONDENT
through: Mr. Hrishikesh Baruah,
Advocate with Mr. Balvir S.
Dosanjh, Advocate.
+ W.T.A. No.2 of 2010
COMMISSIONER OF WEALTH TAX . . . APPELLANT
through : Mr. Sanjeev Rajpal, Standing
Counsel.
VERSUS
SOHNA FORGE PVT. LTD. . . .RESPONDENT
through: Mr. Hrishikesh Baruah,
Advocate with Mr. Balvir S.
Dosanjh, Advocate.
+ W.T.A. No.3 of 2010
COMMISSIONER OF WEALTH TAX . . . APPELLANT
through : Mr. Sanjeev Rajpal, Standing
Counsel.
WTA No.1, 2, 3, 4, 5, 6/2011 Page 1 of 6
VERSUS
SOHNA FORGE PVT. LTD. . . .RESPONDENT
through: Mr. Hrishikesh Baruah,
Advocate with Mr. Balvir S.
Dosanjh, Advocate.
+ W.T.A. No.4 of 2010
COMMISSIONER OF WEALTH TAX . . . APPELLANT
through : Mr. Sanjeev Rajpal, Standing
Counsel.
VERSUS
SOHNA FORGE PVT. LTD. . . .RESPONDENT
through: Mr. Hrishikesh Baruah,
Advocate with Mr. Balvir S.
Dosanjh, Advocate.
+ W.T.A. No.5 of 2010
COMMISSIONER OF WEALTH TAX . . . APPELLANT
through : Mr. Sanjeev Rajpal, Standing
Counsel.
VERSUS
SOHNA FORGE PVT. LTD. . . .RESPONDENT
through: Mr. Hrishikesh Baruah,
Advocate with Mr. Balvir S.
Dosanjh, Advocate.
+ W.T.A. No.6 of 2010
COMMISSIONER OF WEALTH TAX . . . APPELLANT
through : Mr. Sanjeev Rajpal, Standing
Counsel.
VERSUS
SOHNA FORGE PVT. LTD. . . .RESPONDENT
WTA No.1, 2, 3, 4, 5, 6/2011 Page 2 of 6
through: Mr. Hrishikesh Baruah,
Advocate with Mr. Balvir S.
Dosanjh, Advocate.
CORAM :-
HON'BLE MR. JUSTICE A.K. SIKRI
HON'BLE MR. JUSTICE M.L. MEHTA
1. Whether Reporters of Local newspapers may be allowed
to see the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J. (ORAL)
1. These appeals are filed challenging the orders of the Income
Tax Appellate Tribunal (hereinafter referred to as „the Tribunal‟)
under Wealth Tax proceedings granting the
respondent/assessee benefit of Section 2(ea) of the Wealth Tax
Act, 1957 holding that since the property in question held by
the assessee is use for business purposes, it would be exempt
from the wealth tax.
2. The assessee had been allocated land in question at Plot
No.14/6, Site-IV, Sahibabad Industrial Area, Ghaziabad on 99
years lease by Uttar Pradesh State Industrial Corporation for its
business. The Wealth Tax Officer denied the exemption under
the aforesaid provision and subjected the property to Wealth
Tax on the ground that the assessee was not doing any
business therefrom for last number of years. The contention of
the assessee that it had been doing business and had done job
work, which was not accepted by the Wealth Tax Officer.
3. The CIT (A) took note of the details of job work furnished by the
respondent/assessee. However, he was of the view that this
claim of the assessee that the assessee had done job work did
not repose any confidence in absence of requisite details and
there was no proof submitted by the assessee that it had done
some job work. The CIT (A) even called upon the AO to look
into the issue of reopening of the income tax proceedings to
disallow depreciation, as according to him, no commercial
activities were carried out by the assessee.
4. The Tribunal has, as noticed above, accepted the appeal of the
assessee holding that the assessee had been doing the
business in the form of aforesaid job work and therefore, the
property in question would be exempt from the Wealth Tax, as
per Section 2(ea) of the Wealth Tax Act, which defines "asset"
and specifically excludes the asset occupied by the assessee
for the purpose of any business or profession carried on by him.
5. The Tribunal took note of a very crucial fact, viz., for the
Assessment Years 2001-02 to 2006-07, the assessee had filed
income tax returns in which the assessee had shown business
income. It had also claimed depreciation on the aforesaid
building constructed by the assessee on the leasehold land in
question and this depreciation was allowed by the AO in all
these years. The Tribunal further found that though no regular
assessment under Section 143(3) of the Act for the Assessment
Years 2001-02 to 2004-05 had been made by the AO and in
those Assessment Years, the assessment was completed under
Section 143(1) of the Act, insofar as the Assessment Years
2005-06 to 2006-07 are concerned, the case of the assessee
for these years was selected for scrutiny and regular
assessment under Section 143(3) of the Act had been made
wherein the assessee‟s claim of depreciation on the building
@10% on Written Down Value had been allowed. As mentioned
above, in these Assessment Years, the assessee had shown
income under the head "Profits & Gains of Business or
Profession", which was also accepted by the AO. Even when
the CIT (A) while discussing the case of the assessee under the
Wealth Tax Act had opined that the case of the assessee under
Income Tax Act be reopened, no such steps were taken by the
AO under the provisions of the Act which shows that the
assessments under the Act had become final. This fact was
specifically taken note of by the Tribunal.
6. From the aforesaid narration, it is clear that not only in the
Assessment Years in question, the assessee had carried on its
business utilizing the aforesaid asset for this purpose, but this
decision was even accepted by the Department as well.
7. In these circumstances, we are of the opinion that the order of
the Tribunal is without blemish. We are, thus, of the view that
no substantial question of law arises. These appeals are
accordingly dismissed.
(A.K. SIKRI)
JUDGE
(M.L. MEHTA)
JUDGE
JULY 18, 2011
pmc
