Court : Chennai
Reported in : 2007(1)CTC13; (2006)205CTR(Mad)225; [2006]286ITR297(Mad); (2006)4MLJ836
..... is now necessary to refer to the provision of section 40 of the finance act, 1983 and the same reads as follows: revival of levy of wealth-tax in the case of closely-held companies -(1) notwithstanding anything contained in section 13 of the finance act, 1960 (13 of 1960), relating to exemption of companies from levy of wealth-tax under the wealth-tax act, 1957 (27 of 1957) (hereinafter referred to as the wealth-tax act), wealth-tax shall be charged under the wealth-tax act for every assessment year commencing on and from ..... the court rejected the contention and held that section 40 of the finance act, 1983 covers not only unproductive assets like gold, silver, platinum, stones, ornaments, utensils but also other properties like land and the building appurtenant thereto ..... counsel appearing for the revenue submitted that section 40 of the finance act, 1983 clearly provided for assessment of closely-held companies to wealth-tax. ..... we are of the view that since the case of the assessee does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the finance act, 1983, the assessee is liable to be taxed on the value of the tenanted portion of the building under section 40 of the finance act, 1983. 14. ..... of the view that since the case of the assessee does not fall within the exclusionary clause mentioned in section 40(3)(vi) of the finance act, 1983, the assessee is liable to be taxed on the value of the commercial complex under section 40(3) of the finance act, 1983.12. .....
Tag this Judgment!Court : Chennai
Reported in : (2003)180CTR(Mad)174; [2003]262ITR129(Mad)
..... on the facts and in the circumstances of the case the tribunal was right in law in holding that the property let out by the assessee was not an asset exigible to wealth tax within the meaning of section 40(3)(vi) of finance act, 1983?2.the short facts are that the assessee is a closely held company in which the public are not substantially interested and its assets are subjected to wealth tax. ..... question that arises is whether the value of the portion of the building which was let out by the assessee in favour of punjab national bank would be an exempted asset from the list of assets found in section 40(3) of the finance act 1983? ..... for letting out the properties, the company was owning the property as a landlord and therefore,that part of the building let out to punjab national bank was exigible to wealth tax under section 40(3) of the finance act,1983. ..... it was therefore held held that the property was used by the assessee for its business and therefore, the assessee would be entitled to exemption as provided under section 40(3)(iv) of the finance act, 1983. ..... ,' : [2001]248itr629(bom) and submitted that the income of the property was treated as business income under the income tax act and therefore, the asset of the assessee should be taken as a business asset. ..... 'therefore, the fact that the income from the property was assessed as business income under the income tax act is not conclusive. .....
Tag this Judgment!Court : Chennai
Reported in : (2003)180CTR(Mad)178
..... of facts, two different tribunals have arrived at a diametrically opposite view, one holding that the property let out by the assessee was not exigible to wealth tax under section 40(3)(vi) of the finance act 1983, but on the same set of facts the appellate tribunal for an earlier assessment year though rendered subsequently, took a different view holding that the same property was liable to be taxed under the provisions of ..... that the motor cars, owned as stock in trade of the dealer are liable to be taxed as the words used in section 40(3) of the finance act 1983, do not preclude the exclusion of stock in trade from the list of assets to be valued for the purpose of wealth tax. ..... ' has taken the view that unless a business asset is excluded from the scope of section 40(3)(vi) of the finance act 1983, the asset though a business asset would be liable to be taxed as the list is exhaustive and when the list does not exclude a particular asset, the asset would be liable ..... by the assessee would fall within the clause found in section 40(3)(vi) of the finance act 1983 and therefore, the question whether it is a plant or not is not of ..... the finance minister while introducing the finance bill 1983 has given the reason for introduction of section 40 of the finance act 1983 and the speech of the finance minister reads as under:-'it has come to my notice that some persons have been trying to avoid personal wealth tax liability by forming closely held companies to which they transfer many .....
Tag this Judgment!Court : Chennai
Reported in : (2003)181CTR(Mad)534; [2003]260ITR617(Mad)
..... of the same, the tribunal stated a case and referred the following question of law :'whether, on the facts and in the circumstances of the case, the tribunal was right in law in overlooking sub-section (7) of section 40 of the finance act, 1983, and holding that the said section relating to levy of wealth-tax in the case of closely held companies does not apply to the assessee-club, which has been declared on its own request as a company under ..... though the submission of learned senior standing counsel for the revenue is attractive, however, considering the object behind section 40 of the finance act, 1983, and the purpose for which section 40 was introduced reintroducing levy of wealth-tax in a limited way and in a limited manner and taking note of the marginal heading of section 40 of the finance act and subsequent amendments made in 1992, the intention behind the section and the language employed in the section, we are of the ..... have the meaning assigned in section 2(18) of the income-tax act, 1961, a reading of section 2(18) of the income-tax act shows that the said sub-section applies to a company, but the definition, 'company' found either in section 2(17) of the income-tax act or in section 2(h) of the wealth-tax act, which is pari materia to section 2(17) of the income-tax act, by which the assessee is treated as a company, is not incorporated in section 40 of the finance act, 1983, nor is it a part of the definition of the company in section 2(18) of the .....
Tag this Judgment!Court : Chennai
Reported in : (2004)188CTR(Mad)283; [2004]269ITR203(Mad)
..... submitted by the assessee that, that factory should be excluded from the assessable wealth as the memorandum of association of the company mentions the leasing of the property of the company as one of its objects clause (vi) of section 40(3) of the finance act stipulates that what is to be excluded is a factory which is used by the assessee for the purpose of its business here it cannot be said that the factory was being used by the assessee for the purposes of its business ..... the main question for consideration is whether the godowns let out to food corporation of india would be excluded under the provisions contained in section 40(3)(vi) of the finance act, 1983.4. ..... appeal filed on behalf of the department, the tribunal confirmed the order of the appellate authority by holding that warehouses were the business assets of the assessee and were exempted under the provisions of section 40(3)(vi) of the finance act, 1983. ..... was right in law in holding that the assessee engaged in construction and leasing of warehouses was not liable to wealth-tax in respect of the value of the warehouses as they were exempt under the provisions of section 40(3) of the finance act, 1983?2. ..... -company as godown or warehouse for the purpose of its business it is submitted that unless the building is used by the assessee as godown or warehouse for the purpose of its business, it cannot be excluded under the provisions of section 40(3) of the finance act, 19837. .....
Tag this Judgment!Court : Chennai
Reported in : (2003)182CTR(Mad)380
..... the appellate tribunal also held that section 11(4a) of the act as inserted by finance act, 1983 with effect from 1.4.1984 would not apply as by finance (no.2)act, 1991 the provision has been substituted and the provisions of section 11(4a) as substituted by finance (no.2) act, 1991 with effect from 1.4.1992 would apply for the earlier assessment years in question ..... of an intention on the part of the legislature to have treated what is now included as having been included at all times'.we are of the view that by applying the ratio of the decision the substituted provision of section 11(4a) of the act by finance (no.2) act of 1991 would operate with effect from 1.4.1992 and not from 1.4.1984 as held by the appellate tribunal.6. ..... the appellate tribunal, in our opinion, was not correct in holding that the effect of substitution of section 11(4a) of the act by the finance (no.2) act, 1991 as amended in 1992 was to have effect from the date of insertion of section 11(4a), that is, with effect from ..... on the other hand, the reading of the finance (no.2) act, 1991 shows the intention of the legislature is that the existing section 11(4a) of the act is to be substituted with effect from 1.4.1992 and ..... the finance (no.2) act, 1991 came into force with effect from 1.4.1992 and the intention of the parliament was to substitute the existing section 11(4a) of the act with effect from 1.4.1992 and the intention is manifest that the section 11(4a) of the act as substituted was inserted only from .....
Tag this Judgment!Court : Chennai
Reported in : [2000]244ITR521(Mad)
..... further, in so far as the assessment year 1979-80 is concerned, the amendment made by the finance act, 1983, to section 37(5) would apply and for that assessment year, on the basis of the legislative amendment, the accommodation is liable to be regarded as a guest house ..... our conclusion is supported by the subsequent legislative amendment inserting sub-section (5) of section 37 of the act by the finance act, 1983, with effect from april 1, 1979. ..... the tribunal, after noticing the budget speech of the finance minister rendered when the particular provision was introduced and the memo explaining the provisions of the act came to the conclusion that the circuit house maintained by the assessee was not a guest house ..... aruna sugars ltd : [1980]123itr619(mad) considered the expression 'guest house' under section 37(3) of the act and held that where any accommodation is maintained either in the principal place of business or in a place where the factory is located for the directors and other employees of the assessee-company who have to visit it for ..... of the case and having regard to the provisions of section 37(4) of the income-tax act, 1961, the appellate tribunal was right in holding and had valid materials to hold that the circuit house maintained by the assessee was not a guest housb and that the expenditure on such house and depreciation could not be disallowed under section 37(4)(i) of the income-tax act, 1961, in the assessment for the assessment years 1970-71 to 1976-77 ? .....
Tag this Judgment!Court : Chennai
Reported in : (2000)158CTR(Mad)437; [1999]240ITR335(Mad)
..... , held that the hospitality expenditure would not be regarded as entertainment expenditure prior to the insertion of explanation 2 to section 37(2a) of the income-tax act, 1961, by the finance act, 1983, with effect from april 1, 1976. ..... : [1997]224itr353(sc) , wherein the supreme court held that for the purpose of determining the deduction under section 80j of the act, the value of the plant and machinery awaiting installation and the value of the building under construction should be taken into account as a part of the ..... supreme court, the tribunal was correct in holding that while arriving at the capital employed under section 80j of the act, the value of the machinery installed and the value of the building under construction should be taken into account. ..... the wear and tear thereon, which were provided by the company to its directors should not be treated as a 'perquisite' for the purpose of disallowance under section 40a(5) of the income-tax act, 1961, and, therefore, the disallowance of the sum of rs. ..... the applicability of section 40a(5) of the act with reference to the disallowance of rs. ..... section 37 of the act postulates that any expenditure laid out or expended wholly and exclusively for the purpose of the business or profession shall be allowed in computing ..... apex court held that the maintenance expenditure incurred by a company for the car provided to the director of the company should be regarded as perquisite subject to the ceiling provided in section 40a(5) of the act. .....
Tag this Judgment!Court : Chennai
Reported in : (2004)192CTR(Mad)382
..... following the decision in vamdharaja theatre case (supra), we hold that the tribunal is not correct in its view that the theatre complex of the assessee is exempt under section 40(3)(vi) of the finance act, 1983, for the asst. yr. ..... the assessment year involved in the instant case is 1988-89 and the question is whether the assessee is entitled to exemption under section 40(3)(vi) of the finance act, 1983, for the asst. yr. ..... consideration :'whether, on the facts and in the circumstances of the case, the tribunal is correct in law in confirming the order of the cit(a) in directing the exclusion of the value of the theatre complex as exempt under section 40(3)(vi) of the finance act, 1983 ?'3. ..... the revenue has challenged the order of the tribunal directing the exclusion of the theatre complex of the assessee on the ground that it is exempted under s, 40(3)(vi) of the finance act, 1983. ..... (2000) 250 jtr 523 wherein this court held that the exemption granted by the amendment of the finance act, 1988, would operate only from 1st april, 1989, and it is neither retrospective nor declaratory of the law. ..... 1988-89 as well as the exemption granted by the finance act, 1988, came into force w.e.f. ..... this court in the above case has also held that cinema building owned by the assessee is not exempt under section 40(3)(vi) of the finance act prior to 1st april, 1989. .....
Tag this Judgment!Court : Chennai
Reported in : [2000]241ITR439(Mad)
..... and not maintainable (ii) whether, on the facts and in the circumstances of the case, the tribunal was right in law in holding that even where a property is valued under the specific provisions of sub-section (4) of section 40 of the finance act, 1983, for the purpose of levy of wealth-tax in the case of closely held companies, the provisions of section 7(1) and rule 1bb must be applied ignoring the provisions of section 40(5)(b) of the ..... and hence rule 1bb could not be applied to value it and section 40(4) of the finance act, 1983, excluded application of section 7(1) and rule 1bb made thereunder and accordingly assessed the property at rs. ..... the commissioner agreed with the assessee's case that section 40 of the finance act, 1983, did not exclude the operation of rule 1bb and accordingly directed the assessing officer to refer the matter again to the valuation officer to determine the value of the property on the basis of net maintainable rent as ..... the commissioner took the view that section 40 of the finance act did not exclude the operation of rule 1bb which was confirmed by the tribunal. ..... counsel for the assessee submitted that sub-section (5) of section 40 specifically excluded certain sections of the wealth-tax act except section 7(1) and, therefore, rule 1bb was applicable. .....
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