DCIT, CHENNAI v. M/s. Ramgosri Constructions P. Ltd., CHENNAI

IN THE INCOMETAX APPELLATE TRIBUNAL: C - BENCH:CHEN NAI (BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER & ABRAHAM P. GEORGE. ACCOUNTANT MEMBER) ITA NOS.2047 & 2048/MDS/2010 & WTA NO.41/MDS/10 ASST. YEARS 2003-04 2006-07 & 1998-99 THE DCIT CO. CIR. V (3) CHENNAI (APPELLANT) VS. M/S RAMGOSRI CONSTRUCTIONS P.LTD. 225 METTUKUPPAM OKKIAM THORAIPAKKAM CHENNAI 600096 PAN AABCR9988E (RESPONDENT) APPELLANT BY RESPONDENTS BY: SHRI TAPASKUMAR DUTTA CIT- DR NONE ORDER PER SHRI ABRAHAM P.GEORGE A.M: THESE ARE APPEALS OF REVENUE FOR THE RESPECTI VE ASSESSMENT YEARS. APPEAL RELATING TO A.Y 2006-07 IS TAKEN UP FIRST FO R DISPOSAL. IN THIS APPEAL NUMBERED AS ITA NO.2048/MDS/10 AGAINST THE ORDER DA TED 26-08-2010 OF S2047-8 & WTA 41/MDS/10. 2 THE CIT(A)-V CHENNAI FOUR GROUNDS HAVE BEEN TAKEN BY REVENUE ALTOGETHER. 2. GROUND NOS. 1 AND 2 ARE GENERAL NEEDING NO ADJUD ICATION. 3. VIDE ITS GROUND NO.2 GRIEVANCE OF THE REVENUE IS THAT CIT(A) ALLOWED THE CLAIM OF BUSINESS LOSS MADE BY THE ASSE SSEE THOUGH SUCH BUSINESS LOSS WAS REJECTED BY AO. 4. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD FILED A RETURN FOR THE IMPUGNED A.Y DECLARING AN INCOME OF ` 24 72 677/-. INCOME SO ADMITTED WAS ARRIVED AT BY SETTING OFF BUSINESS LOSS OF ` 8 64 486/- WITH HOUSE PROPERTY INCOME OF ` 33 37 163/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY AO THAT ASSESSEE WAS IN THE PROCESS OF STARTING A BUSINESS OF MANUFACTURING SEWAGE WATER T REATMENT PLANT (SWTP FOR SHORT) AND EXPLANATIONS WERE SOUGHT. VIDE ITS LETTER DATED 18-03-2008 ASSESSEE SUBMITTED THAT DURING THE FIRST TWO YEARS AFTER ITS INCORPORATION IT WAS IN THE BUSINESS OF MANUFACTURING OF MOULDS FOR PLASTIC INDUSTRY AND THEREAFTER IT HAD SWITCHED OVER TO LETTING CAR ON H IRE. THE LATTER BUSINESS AS PER ASSESSEE WAS CARRIED ON FOR FOUR YEARS VIZ. A.Y S. 2000-01 TO 2003-04. ACCORDING TO ASSESSEE THEREAFTER THERE WAS LULL IN THE BUSINESS ACTIVITY AND DURING THE PREVIOUS YEAR RELEVANT TO THE IMPUGN ED A.Y IT HAD STARTED THE NEW BUSINESS LINE OF MANUFACTURING SWTP. ASSESS EE HAD SHOWN A S2047-8 & WTA 41/MDS/10. 3 SALE OF SWTP TO ONE M/S MODISTA RESORTWEAR GOA (M ODISTA FOR SHORT) FOR ` 5.20 LAKHS. IN SUPPORT OF THIS CLAIM ASSESSEE ALSO PRODUCED INVOICES RAISED BY IT TO MODISTA ALONGWITH GOODS CONSIGNMEN T NOTE OF ONE EZHUMALAIYAN TRANSPORT GROUP. AS PER THE SAID INVOI CE AND GOODS CONSIGNMENT NOTE THE GOODS WERE DISPATCHED ON 08-11 -2005. AO ISSUED A NOTICE TO THE SAID MODISTA WHO REPLIED ON 12-08-20 08 AND RELEVANT PART OF SUCH REPLY WAS AS UNDER: REFERENCE TO THE ABOVE NOTICE WE WISH TO INFOR M YU THAT OUR COMPANY WAS STARTED IN 1982 AND WE ARE DEALING IN F URNITURE ITEM BAGS AND CHEMICALS. SINCE THE DAY OF STARTING OF OU R COMPANY TILL TODAY WE DO NOT HAVE ANY TRANSACTIONS REFERRED BY YOU IN THE ABOVE NOTICE WHATSOEVER NATURE WITH THE ABOVE COMPANY. AS SUCH WE ARE NOT ABLE TO FURNISH THE DETAILS REQUIRED BY YOU. 5. THE AO THEREAFTER VERIFIED THE BANK PASS BOOK OF THE ASSESSEE AND FOUND THAT IT HAD SHOWN RECEIPT OF ADVANCE FROM MODISTA ON 31-08- 2005 27-10-2005 AND 08-12-05. ASSESSEE WAS PUT ON NOTICE REGARDING DENIAL OF MODISTA ON ANY PURCHASES MADE BY IT FROM THE ASSESSEE. SUBMISSION OF THE ASSESSEE WAS THAT PURCHASE ORDER FOR THE WASTE WATER TREATMENT PLANT WAS RECEIVED FROM ONE M/S ECO ENVIR O ENGINEERING GOA AND SALE INVOICE WAS RAISED ON MODISTA AS PER TERMS OF THE SAID PURCHASE ORDER. ASSESSEE ALSO FURNISHED A COPY OF TRANSPORT CHALLAN WHICH HAD OVERLEAF AN ENDORSEMENT REGARDING RECEIPT OF GOODS IN GOOD CONDITION. ASSESSEE ALSO BROUGHT TO THE NOTICE OF AO THAT THE REMITTANCES S2047-8 & WTA 41/MDS/10. 4 WERE RECEIVED IN ITS BANK ACCOUNT FROM THE PANAJI BRANCH AND EXPRESSED DISMAY WHY THE SALE WAS DENIED BY MODISTA. HOWEVER AO WAS OF THE OPINION THAT THE SALE WAS A COOKED UP STORY AND IN THE FACE OF DENIAL BY MODISTA IT COULD NOT BE BELIEVED. FURTHER AS PER A O THOUGH GOODS WERE STATED TO HAVE BEEN COVERED UNDER INSURANCE NO INS URANCE CHARGES WERE DEBITED IN THE PROFIT AND LOSS ACCOUNT. THUS CLAIM OF RUNNING A BUSINESS WAS NOT ACCEPTED BY AO. 6. BEFORE THE LD. CIT(A) ARGUMENT OF THE ASSESSEE WAS THAT DOCUMENTS PRODUCED CLEARLY PROVED SALE OF WASTE WATER TREATME NT PLANT TO MODISTA AND THESE WERE REJECTED SUMMARILY WITHOUT PROPER VE RIFICATION OF RECORDS. FURTHER AS PER ASSESSEE TRANSPORT INVOICES CLEARLY SHOWED PHYSICAL TRANSPORTION OF THE PLANT TO GOA AND ALL THESE COUL D NOT BE CONSIDERED AS A COOKED UP STORY. 7. LD.CIT(A) WAS APPRECIATIVE OF THIS CONTENTION . ACCORDING TO HIM AO HAD REACHED A HASTY CONCLUSION AND THEREFORE ASSESS EES CLAIM OF HAVING DONE BUSINESS OF SELLING WASTE WATER TREATMENT PLAN T HAD TO BE ACCEPTED. 8. WHEN THE MATTER CAME UP BEFORE US NOBODY APPEAR ED ON BEHALF OF THE ASSESSEE. THOUGH THERE WAS A PETITION FOR ADJOU RNMENT FILED BY SHRI S.SRIDHAR ADVOCATE NO POWER OF ATTORNEY WAS FILED BY THE ASSESSEE EMPOWERING SHRI S.SRIDHAR ADVOCATE TO APPEAR ON IT S BEHALF. IN THE S2047-8 & WTA 41/MDS/10. 5 ABSENCE OF A POWER WE ARE NOT CONSIDERING THE PETIT ION FOR ADJOURNMENT FILED BY SHRI S.SRIDHAR ADVOCATE. 9. LD. DR STRONGLY ASSAILING THE ORDER OF CIT(A) SU BMITTED THAT CIT(A) DID NOT CORRECTLY ASSIMILATE THE FACTS AND ACCEPTED THE PLEA OF THE ASSESSEE THAT THERE WAS A BUSINESS CARRIED ON BY IT . ACCORDING TO HIM SALE ITSELF WAS NOT THERE AND EVEN OTHERWISE ONE SALE OF ONE ITEM WOULD NOT BE SUFFICIENT TO HOLD THAT ASSESSEE WAS CARRYING ON AN Y BUSINESS. FURTHER AS PER LD. DR THE PURCHASER HAD DENIED THE TRANSACTION AND CIT(A) JUST WENT BY TRANSPORT INVOICES. LD. DR FURTHER POINTED OUT T HAT THERE WAS AN ALLEGED PURCHASE OF PUMPS AND MOTORS FOR ` 1 00 700/- FROM M/S A.G.BEST ELECTRICAL WORKS ON 17-10-2005 STATED TO HAVE BEEN USED IN THE PLANT SOLD BY ASSESSEE AND ANY SUCH SALE TO THE ASSESSEE WAS DENIED BY PROPRIETOR OF THE SAID M/S. A.G.BEST ELECTRICAL WORKS SHRI P. GUNASEKARAN. 10. WE HAVE PERUSED THE ORDERS AND CAREFULLY CONSID ERED THE SUBMISSIONS OF THE LD. DR. THE PRIMARY QUESTION IS WHETHER SALE OF WASTE WATER TREATMENT PLANT ALLEGED TO HAVE BEEN MADE TO MODISTA CAN BE ACCEPTED OR NOT. ASSESSEE HAD PRODUCED INVOICE RAIS ED ON MODISTA ON 08- 11-2005. ASSESSEE HAD ALSO PRODUCED TRANSPORTATION INVOICES WHEREIN CONSIGNEE WAS SHOWN AS MODISTA. ASSESSEE HAD VIDE I TS LETTER DATED 12- 11-2008 FILED A COPY OF PURCHASE ORDER RECEIVED FR OM ONE M/S ECO ENVIRO ENGINEERING GOA AND COPY OF A TRANSPORT CHALLAN W HICH ON ITS BACKSIDE S2047-8 & WTA 41/MDS/10. 6 ENDORSED RECEIPT OF PLANT IN GOOD CONDITION IN GOA. AGAINST THESE DOCUMENTS WHICH ARE IN FAVOUR OF THE ASSESSEE THER E ARE TWO DOCUMENTS WHICH ARE PITTED AGAINST IT BY THE REVENUE. ONE IS LETTER FROM MODISTA IN WHICH THEY DENIED ANY TRANSACTION WITH ASSESSEE. SE COND IS A LETTER BY SHRI P.GUNASEKARAN PROPRIETOR OF M/S A.G. BEST ELE CTRICAL WORKS WHEREIN HE DENIED ANY SALE OF PUMPS AND MOTORS OR ANY ITEM TO THE ASSESSEE. WE ARE OF THE OPINION THAT THE EVIDENCE PITTED AGAINST ASSESSEE ARE FAR STRONGER THAN THE EVIDENCE PRODUCED BY IT IN ITS F AVOUR. HAD MODISTA MADE A PURCHASE FROM THE ASSESSEE IT WOULD NOT HAVE DEN IED IT FOR THEY WOULD HAVE GAINED NOTHING BY SUCH DENIAL. EVEN OTHERWISE THE PURCHASE ORDER AS PER ASSESSEE ITSELF WAS RECEIVED FROM ONE M/S EC O ENVIRO ENGINEERING AND NOT FROM MODISTA. SECONDLY THE PURCHASE OF PUMP S AND MOTORS FROM M/S A.G.BEST ELECTRICAL WORKS STATED TO HAVE BEEN USED IN THE PLANT SOLD WAS DENIED BY THE SAID FIRM. AS PER THE ASSESSEE P AYMENT TO THE SAID SUPPLIER WAS WITHHELD SINCE THE PUMPS AND MOTORS SU PPLIED BY THEM MALFUNCTIONED. ASSESSEE COULD NOT PRODUCE ANY DELIV ERY CHALLAN PAYMENT DETAILS OR ANY EVIDENCE IN SUPPORT OF THE PURCHASE. THUS WITHOUT MAKING ANY PURCHASE ASSESSEE HAD CLAIMED TO HAVE ACQUIRED AND SOLD ONE WASTE WATER TREATMENT PLANT. AO IN THE FACE OF THESE IF HE CONSIDERED THE CLAIM OF THE ASSESSEE THAT IT HAD CARRIED ON ANY SALE OF WA STEWATER TREATMENT PLANT TO BE BOGUS WE CANNOT FIND FAULT WITH HIM. CIT(A) SIMPLY OVERRULED THE AO FOR A REASONING THAT THERE WAS NO ADVERSE FINDING O N THE DOCUMENTS S2047-8 & WTA 41/MDS/10. 7 PRODUCED BY ASSESSEE. IN OUR OPINION THE DOCUMENTS PRODUCED BY ASSESSEE CLEARLY STOOD REBUTTED BY THE STATEMENTS G IVEN BY THE ALLEGED SELLER/PURCHASER. THE TRANSPORT CHALLAN ENDORSEMEN T ON WHICH WAS CLAIMED BY THE ASSESSEE TO BE EVIDENCE OF DELIVERY DID NOT SHOW WHO TOOK DELIVERY AND ON WHOSE BEHALF. AO HAD NOT MADE ANY SUMMARY REJECTION BUT HAD COME TO A CONCLUSION AFTER VERIFYING THE RE CORDS. WE ARE THEREFORE CONSTRAINED TO ALLOW GROUND NO.2 TAKEN BY REVENUE. THE CLAIM OF ANY BUSINESS HAVING BEEN DONE WAS RIGHTLY REJECTED BY T HE AO. 11. VIDE ITS GROUND NO.3 GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) ERRED IN ALLOWING EXPENSES UNDER THE HEADS REPAIRS AND MAINTENANCE PROFESSIONAL CHARGES AND FREIGHT. ASSESSEE HAD IN ITS PROFIT AND LOSS ACCOUNT CLAIMED EXPENSES OF ` 4 44 249/- ON REPAIRS AND MAINTENANCE ` 1 42 050/- ON PROFESSIONAL CHARGES AND ` 22 570/- AS FREIGHT EXPENSES. AS PER ASSESSEE REPAIRS AND MAINTENANCE WERE INCUR RED BY IT IN A FACTORY LEASED AT KARAPAKKAM AND IT HAD TO BE ALLOWED AS A REVENUE EXPENDITURE. AO WAS NOT APPRECIATIVE OF THIS CONTENTION. ACCORDI NG TO HIM ASSESSEE HAD STARTED A NEW LINE OF BUSINESS OF WASTE WATER T REATMENT PLANT AND THEREFORE SUCH EXPENDITURE HAD TO BE CAPITALIZED. I NSOFAR AS THE CLAIM OF PROFESSIONAL CHARGES WAS CONCERNED AO WAS OF THE O PINION THAT IT RELATED TO REGISTRATION OF A PATENT FOR THE WASTE WATER TRE ATMENT PLANT AND HENCE S2047-8 & WTA 41/MDS/10. 8 WAS A CAPITAL OUTGO. THERE BEING NO SALES FREIGHT CHARGES WAS ALSO NOT CONSIDERED AS ALLOWABLE. 12. HOWEVER LD. CIT(A) WAS OF THE OPINION THAT AO WAS UNABLE TO MAKE OUT A CLEAR CASE WHY THE ABOVE EXPENSES WERE NOT AL LOWABLE AND HE HAD COME TO A HASTY CONCLUSION. HE THEREFORE ALLOWED THE CLAIM OF EXPENSES. 13. NOW BEFORE US LD. DR STRONGLY ASSAILING THE OR DER OF CIT(A) SUBMITTED THAT THERE WAS NO BUSINESS DONE BY ASSESS EE DURING THE RELEVANT PREVIOUS YEAR AND HENCE EXPENSES COULD NE VER HAVE BEEN ALLOWED. 14. WE HAVE PERUSED THE ORDERS CAREFULLY AND HEARD THE CONTENTIONS OF THE LD. DR. WE FIND THAT ASSESSEE HAS BEEN CLAIMING DIFFERENT LINES OF BUSINESS FOR DIFFERENT YEARS. FOR THE FIRST TWO YEA RS IT HAD CLAIMED THAT IT WAS CARRYING ON BUSINESS OF MANUFACTURING OF MOULDS FOR PLASTIC INDUSTRY AND NEXT FOUR YEARS IT CLAIMED A BUSINESS OF LETTIN G CARS ON HIRE. THEREAFTER ASSESSEE ITSELF ADMITED THAT THERE WAS A LULL IN BU SINESS FOR TWO YEARS. IN THE RELEVANT A.Y IT CLAIMS TO HAVE STARTED THE BUSI NESS OF MANUFACTURING WASTE WATER TREATMENT PLANT. ALLEGED SALE OF WASTER WATER TREATMENT PLANT WAS TO ONE M/S MODISA RESORTWEAR. NEITHER ANY PURCH ASE OF MATERIALS REQUIRED FOR THE SAID PLANT WAS MADE BY ASSESSEE NO R THE ACTUAL SALE THEREOF COULD BE PROVED BY IT AS MENTIONED AT PARA- 10 ABOVE. FINDING OF S2047-8 & WTA 41/MDS/10. 9 THE AO THAT ASSESSEE HAD NOT YET STARTED BUSINESS I N THE LINE OF MANUFACTURE OF WASTE WATER TREATMENT PLANT ATLEAST IN THE RELEVANT PREVIOUS YEAR STANDS CONFIRMED BY US. IF AT ALL IT HAD INCURRED ANY EXPENDITURE IN A FACTORY WHETHER LEASED OR NOT IN THE NATURE OF REPAIRS TO THE PLANT AND MACHINERY THEREIN IT WOULD BE ONLY A PRE-OPERATIVE EXPENDITURE SINCE IT WAS YET TO START ITS BUSINES S. SUCH PRE-OPERATIVE EXPENSES HAD TO BE CAPITALIZED AND WE FIND THAT THE AO WAS JUSTIFIED IN TREATING IT SO. SIMILARLY PROFESSIONAL CHARGES FOR GETTING PATENT WAS ALSO RIGHTLY TREATED BY AO AS CAPITAL EXPENDITURE. SIMIL ARLY THE SUM OF ` 15 000/- PAID FOR SALES-TAX REGISTRATION AND AMOUNT OF ` 10 000/- FOR GETTING STAY FROM HIGH COURT WERE ALL PRE-OPERATIVE EXPENSES SINCE AS SESSEE WAS YET TO START COMMERCIAL OPERATION IN THE NEW LINE OF BUSIN ESS DURING THE RELEVANT PREVIOUS YEAR. THERE BEING NO SALE OR PURCHASE THE QUESTION OF ANY FREIGHT DID NOT ARISE. WE ARE OF THE OPINION THAT AO WAS JU STIFIED IN DISALLOWING THE CLAIM OF SUCH EXPENSES. CIT(A) HAD NOT PROPERLY APP RECIATED THE FACT THAT ASSESSEE WAS YET TO START BUSINESS IN MANUFACTURING AND TRADING OF WASTE WATER TREATMENT PLANT. THIS BEING SO AND AO HAVING MADE OUT A CLEAR CASE WHY EXPENSES WAS NOT ALLOWABLE CIT(A) FELL IN ERRO R IN ALLOWING CLAIMS OF THE ASSESSEE. GROUND NO.3 OF THE REVENUE STANDS ALL OWED. 15. IN THE RESULT APPEAL OF THE REVENUE FOR A.Y 20 06-07 STANDS ALLOWED. S2047-8 & WTA 41/MDS/10. 10 16. NOW WE TAKE UP APPEAL OF THE REVENUE FOR A.Y 20 03-04 IN ITA NO.2047/MDS/10. 17. FOUR GROUNDS HAVE BEEN TAKEN BY REVENUE OF WHIC H GROUND NOS.1 AND 4 ARE GENERAL IN NATURE NEEDING NO ADJUDICATION . 18. VIDE ITS GROUND NO.2 GRIEVANCE OF THE REVENUE I S THAT CIT(A) ALLOWED CLAIM OF THE ASSESSEE THAT IT WAS CARRYING ON A BUSINESS OF HIRING ITS CAR. 19. SHORT FACTS APROPOS ARE THAT ASSESSEE HAD DURIN G THE RELEVANT PREVIOUS YEAR RETURNED A TOTAL INCOME OF `25 77 504/-. THE SAID TOTAL INCOME WAS ARRIVED AT BY SETTING OFF BUSINESS LOSS OF `1 42 413/- AGAINST INCOME FROM HOUSE PROPERTY `27 19 917/-. DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTED BY AO THAT THE ONLY BUSINESS INCOME SHOWN BY ASSESSEE WAS RENTAL RECEIVED ON HIRING OF A CAR. ASSESSEE WAS HAVING A FORD ESCORT CAR PURCHASED IN JULY 19 99. AS PER ASSESSEE THE SAID CAR WAS UNDER THE CONTROL OF ITS GENERA L MANAGER AND USED BY ITS STAFF FOR GENERAL PURPOSES. WHEN THE CA R WAS NOT USED IT WAS HIRED TO PERSONS KNOWN TO THE COMPANY AT RATES LOWER THAN MARKET VALUE. LOSS CLAIMED BY ASSESSEE ARISING OUT OF THI S CAR HIRE WAS DISALLOWED BY AO IN THE ORIGINAL ASSESSMENT. CIT(A) IN T HE APPEAL OF ASSESSEE GAVE PARTIAL RELIEF TO THE ASSESSEE AGAINST WHICH BOTH REVENUE AS WELL AS THE ASSESSEE MOVED IN APPEAL BEFORE TH IS TRIBUNAL. S2047-8 & WTA 41/MDS/10. 11 THIS TRIBUNAL VIDE ITS ORDER DATED04-04-2007 IN ITA NOS.1184/MDS/06 AND 1539/MDS/06 HELD AS UNDER 8. THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS DECLARED THE INCOME FROM HIRING OF CAR AS BUSINESS INCOME AND DECLARED TOTAL RECEIPTS AT ` 9900/- FOR THE AY 2000-01 AND ALSO FOR OTHER ASST. YEARS VERY NOMINAL INCOME WEAS ADMITTED. AS AGAINST THIS CAR HIRE CHAR GES THE ASSESSEE CLAIMED EXPENDITURE AND BUSINESS LOSS OF ` .4 31 122/- ADJUSTED AGAINST THE INCOME FROM HOUSE PROPERTY AND OTHER INCOMES. S IMILARLY THE ASSESSEE WAS QUESTIONED ABOUT THE EXORBITANT EXPEND ITURE FOR OTHER TWO YEARS. ONE OF THE DIRECTORS SRI NARENDRA GHORPADE WAS EXAMINED UNDER SEC.131 OF THE ACT AND HE HAS CATEGORICALLY STATED THAT THE ASSESSEE- COMPANY PURCHASED A FORT ESCORT CAR IN JULY 1999 AN D THE CAR WAS; UNDER THE CONTROL OF GENERAL MANAGER OF THE COMPANY AND W AS USED BY THE STAFF FOR BAKING PURPOSES AND SEEKING FRESH BUSINESS OPPO RTUNITIES. THE CAR WAS NOT ALWAYS USED BY THE ASSESSEE AND ON CERTAIN OCCASIONS THE CAR WAS HIRED TO PERSONS KNOWN TO THE DIRECTORS AND EMP LOYEES OF THE COMPANY FOR A NOMINAL CHARGES WHICH IS LESS THAN TH E MARKET RATE. HE ALSO ADMITTED TO HAVE SOLD THE CAR IN MAY 2002 AND THERE WAS NO MUCH OF USE AND THE CAR WOULD HAVE RUN ABOUT 30 000 KMS. DU RING JULY 1999 TO MAY 2002. IT IS SUBMITTED THAT ASSESEE HAS CHARGED NOMINAL HIRE CHARGES FOR THESE THREE CARS AND THAT ALSO A UNIFORM RATE O F ` 900/- PER DAY. IT IS A FINDING OF FACT BY THE AO THAT THE ASSESSEE COULD N OT FURNISH THE NAME AND ADDRESSES OF THE PERSONS FROM WHOM THE ADVANCES WER E RECEIVED AND ALSO THE PURPOSE FOR THE RECEIPT OF THE ADVANCES D ESPITE A SPECIFIC REQUEST WAS MADE TO IT. DURING THE COURSE OF HEARING THE L D. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE PAPER BOOK FILD AND ALSO THE LETTE4RS WRITTEN TO THE AO WHEREIN THE DETAILS OF P ERSONS FROM WHOM CAR HIRE CHARGES WERE RECEIVED WERE GIVEN. THE ASSESSEE HAS ALSO FILED THE NAMES OF THE PERSONS WHO HAS HIRED THE CAR BEFORE T HE AO. IT WAS ALSO CLAIMED BEFORE US THAT THE ASSESSEE HAS TEMPORARILY SUSPENDED ITS BUSINESS ACTIVITY TO THESE THREE YEARS AND ITS MAIN BUSINESS WAS HIRING OF CAR AND THE EXPENDITURE INCURRED ON MAINTENANCE OF CAR PETROL DEPRECIATION ETC. IS TO BE ALLOWED AS BUSINESS EXPE NSES. 9. AFTER HEARING THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS OF THE CASE IT IS SEEN THAT NEITHER THE AO NOR THE CIT (A) HAS GONE INTO ;THE RELEVANT DETAILS AND IT IS NOT CLEAR WHETHER T HE SAME WAS FILED BEFORE THE AO OR NOT. EVEN THE AO HAS NOT EXAMINED AS TO WHETHER THE ASSESSEES BUSINESS WAS UNDER SUSPENSION OR NOT SO AS TO CLAIM A BUSINESS LOSS OR BUSINESS EXPENDITURE. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THIS ISSUE B E REMITTED BACK TO THE FILE OF THE AO WITH SPECIFIC DIRECTION TO FIND OUT WHETHER THE ASSESSEE HAS TEMPORARILY SUSPENDED ITS BUSINESS AND ACTUALLY S2047-8 & WTA 41/MDS/10. 12 INCURRED THE EXPENDITURE TO THE EXTENT OF THE CLAIM FOR HIRING OF CAR BUSINESS. ACCORDINGLY WE REMIT THE ISSUE TO THE FI LE OF THE AO WITH THE ABOVE DIRECTIONS. 20. PURSUANT TO SUCH DIRECTION THE ISSUE WAS RECONS IDERED BY THE AO. ASSESSEE WAS REQUIRED TO PRODUCE EVIDENCE FOR EXPEN DITURE INCURRED AND RECEIPTS IN RELATION TO THE CAR HIRE BUSINESS. THE DETAILS CALLED FOR BY AO WERE AS UNDER: 1. CASH BOOK LEDGER BILLS VOUCHERS. 2. MODE OF RECEIPT OF CAR HIRE CHARGES. 3. ORIGINAL RECEIPT BOOK FOR CAR HIRE CHARGES. 4. LOG BOOK OF CAR RUNNING. 5. DRIVER SALARY DETAILS WITH NAME AND ADDRESS O F THE DRIVER. 6. FUEL EXPENSES DETAILS ALONGWITH ORIGINAL SLIP FOR PURCHASE OF FUEL. 7. TOTAL MILEAGE DETAILS FOR RUNNING OF CARS ON HIRE. 8. STAFF ENGAGED TO LOOK AFTER THE HIRING BUSINE SS & HIS SALARY DETAILS. 9. DETAILS OF PERSONS WITH ADDRESS WHO HAS SIGNE D THE VOUCHERS PRODUCED DURING THE ORIGINAL ASSESSMENT. 21. ASSESSEE THEREUPON PRODUCED BOOKS OF ACCOUNT A ND SUBMITTED THAT CAR HIRE CHARGES WERE RECEIVED IN CASH. CASH RECEIP TS WERE PRODUCED. ASSESSEE ALSO SUBMITTED THAT IT DID NOT HAVE ANY LO G BOOKS FOR VEHICLE AND THE CAR WAS GIVEN ON HIRE WITHOUT ANY DRIVER. AS PE R ASSESSEE MILEAGE RUN ON HIRE WAS IRRELEVANT SINCE THE CAR WAS GIVEN ON H IRE ON DAILY RENTAL. AO WAS NOT IMPRESSED. ACCORDING TO HIM CASH RECEIPTS WERE NOT COUNTERSIGNED BY ANY THIRD PARTY AND NOTHING REGARD ING USE OF THE CAR WAS AVAILABLE ON RECORD. AO HELD THAT THERE WAS NO BUSI NESS OF HIRING CAR. S2047-8 & WTA 41/MDS/10. 13 INSOFAR AS THE CLAIM REGARDING TEMPORARY LULL IN BU SINESS WAS CONCERNED AO NOTED THAT ASSESSEE COULD NOT GIVE ANY SATISFACT ORY REPLY AS REQUIRED BY THIS TRIBUNAL AS PER AO ASSESSEE WAS NOT CARRYI NG ON ANY BUSINESS ACTIVITY AT ALL SINCE ITS VERY INCORPORATION AND HENCE IT WOULD NOT BE ENTITLED TO ANY SET OFF OF BUSINESS LOSS CLAIMED TO HAVE BEEN SUFFERED ON ACCOUNT OF CAR HIRING. 22. HOWEVER CIT(A) IN THE SECOND ROUND OF PROCEEDI NGS IN APPEAL WAS OF THE OPINION THAT ASSESSEE HAD PRODUCED SUFFICIEN T EVIDENCE FOR RECEIPT OF CAR HIRE CHARGES INCLUDING DETAILS OF PERSONS FROM WHOM SUCH HIRE CHARGES WERE RECEIVED. ACCORDING TO HIM THE DOCUMENTS PROD UCED BY THE ASSESSEE COULD NOT BE DISCARDED. HE WAS OF THE OPIN ION THAT CASH RECEIPTS WERE REJECTED BY AO WITHOUT ANY SPECIFIC REASON AND AO HAD MADE AN ARBITRARY APPROACH WHILE DISALLOWING THE CLAIM OF BUSINESS LOSS. 23. NOW BEFORE US LD. DR STRONGLY ASSAILING THE OR DER OF CIT(A) SUBMITTED THAT ASSESSEE WAS NOT ABLE TO SHOW ANY TE MPORARY SUSPENSION OF ITS BUSINESS AND COMMERCIAL HIRING OF ITS ASSETS WAS DONE WHEN THERE WAS SUCH LULL IN BUSINESS. THEREFORE ACCORDING TO HIM CIT(A) FELL IN ERROR IN HOLDING THAT ANY BUSINESS OF CAR HIRING WAS DONE BY THE ASSESSEE. 24. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTEN TIONS OF THE LD. DR. TWO FACTS STAND OUT. FIRST IS THAT ASSESSEE WAS HAVING ONLY ONE CAR S2047-8 & WTA 41/MDS/10. 14 NAMELY A FORD ESCORT. SECOND IS THAT EXCEPT FOR A RECEIPT BOOK FOR RECEIPT OF CAR HIRE CHARGES NOTHING WAS PRODUCED BY ASSESS EE. THE QUESTION IS WHETHER ASSESSEE COULD BE CONSIDERED AS RUNNING A B USINESS OF HIRING OF CARS IN SUCH A SITUATION. AS ALREADY NOTED BY US IN PARA-14 ABOVE IN RELATION TO APPEAL OF THE REVENUE FOR AY 2006-07 A SSESSEE ITSELF HAD SUBMITTED THAT IT WAS HAVING ONLY ONE ACTIVITY DURI NG AYS 2000-01 TO 2003- 04 WHICH WAS THE BUSINESS OF LETTING OUT OF ITS CA R ON HIRE. IT WAS IN SUCH CIRCUMSTANCES THE TRIBUNAL DIRECTED THE AO TO VERI FY WHETHER ASSESSEE HAD ONLY TEMPORARILY SUSPENDED ITS EARLIER BUSINESS . THE ARGUMENT THAT THERE WAS A TEMPORARY SUSPENSION OF EARLIER BUSINES S AND THE HIRING OF CAR COULD BE CONSIDERED ONLY AS HIRING OF COMMERCIAL AS SETS DURING SUCH LULL CANNOT BE ACCEPTED WHEN SUCH LULL EXCEEDED FOUR YE ARS. STOPPING THE BUSINESS ACTIVITIES FOR FOUR YEARS CONTINUOUSLY CAN NOT BE TERMED IN ANY WAY AS A LULL. INITIALLY FOR THE FIRST TWO YEARS ASSESS EES CLAIM WAS THAT IT WAS CARRYING ON BUSINESS OF MANUFACTURING MOULDS WHICH IS STATED IN ITS LETTER DATED 18-03-2008 FILED DURING THE COURSE OF HEARING FOR AY 2006-07. NAME OF THE ASSESSEE COMPANY ITSELF IS M/S RAMGOSRI CONS TRUCTIONS P. LTD. AND ITS MAIN OBJECT COULD NEVER HAVE BEEN BUSINESS OF L ETTING OUT CAR ON HIRE. IF IT WAS A COMMERCIAL HIRING OF A BUSINESS ASSET DURI NG A LULL IN ITS MAIN BUSINESS ACTIVITY THIS ARGUMENT ALSO STANDS DISPEL LED IN VIEW OF THE THE GAP OF FOUR YEARS. EVEN FOR THE AY 2006-07 ASSESSEE WAS UNABLE TO ESTABLISH ANY BUSINESS TO HAVE COMMENCED. AS PER ASSESSEE I T WAS LOOKING FOR S2047-8 & WTA 41/MDS/10. 15 NEW LINES LIKE MANUFACTURE OF WASTE WATER TREATMENT PLANT. OR IN OTHER WORDS THERE WAS AN IMPLIED ACCEPTANCE OF NOT HAVING CARRIED ON ANY BUSINESS AS PER ITS MAIN OBJECT. IN THE FACE OF SU CH CIRCUMSTANCES AND HAVING NOT PRODUCED ANY PROOF TO SHOW THAT ITS BUSI NESS WAS TEMPORARILY STOPPED WE ARE OF THE OPINION THAT THE AO WAS JUST IFIED IN REJECTING THE CLAIM OF THE ASSESSEE THAT IT HAD CARRIED A BUSINES S OF CAR HIRE AND INCURRED A LOSS IN SUCH BUSINESS.. CIT(A) WENT WRON G WHEN HE HELD THAT THE RECEIPTS FROM HIRING OF CAR COULD BE CONSIDERED AS BUSINESS INCOME JUST BECAUSE THE CASH RECEIPTS WERE NOT FOUND TO BE NOT GENUINE. WE ARE OF THE OPINION THAT LD. CIT(A) FELL IN ERROR IN ALLOWING T HE CLAIM OF THE ASSESSEE THAT IT WAS RUNNING A BUSINESS OF HIRING CAR. THIS VIEW OF CIT(A) IS SET ASIDE. GROUND NO.2 OF THE REVENUE THEREFORE STANDS ALLOWE D. 25. VIDE GROUND NO.3 GRIEVANCE OF THE REVENUE IS TH AT CIT(A0 ALLOWED THE CLAIM OF BUSINESS LOSS. AS ALREADY ELABORATED B Y US AT PARA-24 ABOVE ASSESSEES CLAIM OF TEMPORARY LULL OF BUSINESS WAS REJECTED BY THE AO. CONSEQUENTLY ITS CLAIM OF BUSINESS LOSS WAS ALSO NO T ALLOWED. WE HAVE UPHELD THIS ACTION OF THE AO VIDE PARA-24 ABOVE. WH EN ASSESSEE WAS NOT HAVING ANY BUSINESS THERE WAS NO QUESTION OF ALLOWA NCE OF ANY BUSINESS EXPENSES. WE ARE OF THE OPINION THAT CIT(A) FELL IN ERROR IN ALLOWING THE BUSINESS LOSS CLAIMED BY ASSESSEE. FOR THE SAME REA SONS AS MENTIONED BY US AT PARA-24 ABOVE DISALLOWANCE OF THE LOSS IS REINSTATED. WE ALLOW S2047-8 & WTA 41/MDS/10. 16 THIS GROUND RAISED BY THE REVENUE AND REINSTATE TH E DISALLOWANCE MADE BY THE AO. 26. IN THE RESULT APPEAL OF THE REVENUE FOR AY 200 3-04 IS ALLOWED. 27. NOW WE TAKE UP THE APPEAL OF REVENUE IN WTA NO. 41/MDS/10 FOR AY 1998-99. REVENUE HAS FILED THIS APPEAL WITH A DE LAY OF 37 DAYS. AN AFFIDAVIT HAS BEEN FILED BY REVENUE WHEREIN IT IS S TATED THAT MOVEMENT OF RECORDS FROM ONE ROOM TO ANOTHER AND MIXING UP OF RECORDS HAD CAUSED THE DELAY. WE ARE CONVINCED OF THE REASONS FILED F OR THE DELAY. THE DELAY IS CONDONED AND APPEAL ADMITTED. 28. SHORT FACTS APROPOS ARE THAT AO NOTED FROM THE INCOME-TAX RETURN FILED BY ASSESSEE THAT ITS MAIN INCOME WAS RENTAL I NCOME FROM FACTORY LAND AND BUILDING. INCOME-TAX RETURN FOR THE IMPUGNED AY SHOWED ANNUAL RENT OF ` 24 32 640/- AS INCOME FROM HOUSE PROPERTY. SINCE AS SESSEE HAD NOT FILED ANY RETURN OF WEALTH NOTICE UNDER SEC. 17 OF THE WEALTH-TAX ACT 1957 (THE ACT FOR SHORT) WAS ISSUED. SUBMISSION OF THE ASSESSEE WAS THAT THE NOTICE ISSUED WAS TIME BARRED AND HENCE NO ACTION W AS REQUIRED FROM ITS SIDE WTO WAS OF THE OPINION THAT NOTICE UNDER SEC. 17 OF THE ACT WAS ISSUED ON 31-03-2005 AND FOR AY 1998-99 SUCH NOTICE COULD BE ISSUED UPTO 31-03-2005. ACCORDING TO AO EVEN IF THE NOTICE WAS SERVED ON THE ASSESSEE IN APRIL 2005 SERVICE OF NOTICE WAS NOT RE LEVANT BUT ONLY THE ISSUE OF NOTICE WAS RELEVANT. HE THEREFORE PROCEEDED TO COMPLETE THE S2047-8 & WTA 41/MDS/10. 17 ASSESSMENT EXPARTE UNDER SEC.16(5) OF THE ACT. RELY ING ON SEC. 2(EA) OF THE ACT AO HELD THAT THE PROPERTY OWNED BY ASSESSEE WAS NOT A PART OF ITS STOCK IN TRADE NOR USED FOR ITS BUSINESS NOR ALLOT TED TO ANY EMPLOYEE AND HENCE WAS TO BE CONSIDERED AS PART OF ITS TAXABLE N ET WEALTH. HE WORKED OUT THE NET MAINTAINABLE RENT BASED ON THE ANNUAL R ENT RETURNED BY ASSESSEE IN ITS INCOME-TAX RETURN AS PRESCRIBED UN DER RULE 3 OF SCHEDULE III OF THE W.T. ACT AND FIXED THE TAXABLE WEALTH AT ` 2 56 40 550/-. 29. ASSESSEE FILED APPEAL BEFORE THE CWT(A). THE PE RTINENT GROUNDS 2 AND 3 ARE REPRODUCED HEREUNDER: 2. FOR ACTION TO BE INITIATED U/S 17 NOTICE SHOULD BE ISSUED WITHIN THE TIME LIMIT SPECIFIED U/S 17(1A)(B) WHICH IS 31-3-20 05 FOR AY 98-99. IN THE INSTANT CASE THE NOTICE IS MERELY DATED 31-3-20 05 BUT ISSUED MUCH LATER. IN VIEW OF THIS THE NOTICE IS INVALID A ND ALL ACTIONS INITIATED BASED ON THAT ARE VOID AB INITIO. 3. WITHOUT PREJUDICE TO THE ABOVE STAND SEC. 2(EA) WAS AMENDED BY THE FINANCE ACT 1998 TO EXCLUDE COMMERCIAL PROP ERTIES FROM THE AMBIT OF THE DEFINITION OF ASSET IN LINE WITH THE I NTENTION OF THE LEGISLATURE NOT TO TAX PRODUCTIVE ASSETS. IT HAS BE EN HELD BY VARIOUS LEGAL FORUMS THAT SUCH AMENDMENTS ARE CLARIFICATORY AND CURATIVE IN NATURE AND TO BE CONSTRUED RETROSPECTIVELY. A RECEN T DECISION IN THIS REGARD WAS THAT OF THE ITAT BANGALORE IN VIBHUTI GU DDA MINES (P) LTD. V. ACIT 2 SOT 452 DATED 22-3-2005 WHEREIN IT H ELD THAT THE AMENDMENT TO THE FIRST PROVISO OF SEC. 43B MADE EFF ECTIVE FROM 1-4- 2004 WAS RETROSPECTIVELY APPLICABLE TO THE AY 1998- 99. 30. LD. CWT(A) HELD THAT THE NOTICE WAS DISPATCHED ON 31-03-2005 THOUGH THE POSTAL AUTHORITIES SHOWED THE DISPATCH D ATE AS 05-04-2005. ACCORDING TO HIM THE DELAY ON THE PART OF THE POST AL AUTHORITIES WOULD NOT S2047-8 & WTA 41/MDS/10. 18 MAKE THE NOTICE TIME BARRED. HOWEVER ON MERIT LD. CWT(A) HELD THAT COMMERCIAL BUILDINGS COULD NOT BE TREATED AS AN ASS ET UNDER W.T. ACT IN VIEW OF AMENDMENT OF SEC. 2(EA) OF THE ACT BY FINAN CE ACT 1998 W.E.F. 01-04-1999. ACCORDING TO HIM THE SAID AMENDMENT WAS CLARIFICATORY AND CURATIVE IN NATURE AND WAS REQUIRED TO BE CONSTRUED RETROSPECTIVELY. 31. NOW BEFORE US LD. DR STRONGLY ASSAILING THE OR DER OF LD. CIT(A) SUBMITTED THAT AMENDMENT TO SECTION 2(EA) OF THE AC T MADE THROUGH FINANCE ACT 1998 WAS NOT CLARIFICATORY AMENDMENT. ACCORDING TO HIM FACTORY LAND AND BUILDING EVEN IF CONSIDERED AS CO MMERCIAL PROPERTY WOULD FALL WITHIN THE DEFINITION OF SEC.2(EA) OF TH E ACT FOR THE IMPUGNED AY. 32. AS ALREADY MENTIONED BY US NOBODY APPEARED ON BEHALF OF THE ASSESSEE. 33. WE HAVE PERUSED THE RECORDS AND HEARD THE CONTE NTIONS OF THE LD. DR CAREFULLY. THERE IS NO DISPUTE THAT THE RENTAL RECEIVED BY ASSESSEE WAS FROM FACTORY LAND AND BUILDING. SO WHAT WAS RENTED OUT WAS FACTORY- LAND AND BUILDING. IN NO SENSE OF THE TERM FACTORY- LAN D AND BUILDING CAN BE CONSIDERED AS SOMETHING OTHER THAN A COMMERCIAL EST ABLISHMENT. CWT(A) HELD THAT CHANGES TO SECTION 2(EA) OF THE ACT MADE THROUGH FINANCE ACT 1998 WITH EFFECT FROM 01-04-1999 WHICH IN EFFECT EXCLUDED COMMERCIAL ESTABLISHMENT FROM THE DEFINITION OF ASSET HAD R ETROSPECTIVE EFFECT. HERE S2047-8 & WTA 41/MDS/10. 19 IT IS NECESSARY TO HAVE A LOOK AT CL.(I) OF SUB-SEC TION (EA) TO SECTION 2 OF THE ACT PRIOR TO THE CHANGES MADE BY FINANCE ( NO.2 ) ACT 1998 AND AFTER THAT. WHAT WAS DONE THROUGH FINANCE (NO.2) ACT 199 8 WAS A SUBSTITUTION. BEFORE SUCH SUBSTITUTION CL. (I) READ AS UNDER: (I) ANY BUILDING OR LAND APPURTENANT THERETO (HEREI NAFTER REFERRED TO AS HOUSE) WHETHER USED FOR RESIDENTIA L OR COMMERCIAL PURPOSES OR FOR THE PURPOSE OF MAINTAINING A GUEST HOUSE OR OTHERWISE INCLUDING A FARM HOUSE SITUATED WITHIN TW ENTY-FIVE KILOMETERS FROM LOCAL LIMITS OF ANY MUNICIPALITY (W HETHER KNOWN AS MUNICIPALITY MUNICIPAL CORPORATION OR BY ANY OTHER NAME) OR A CANTONMENT BOARD BUT DOES NOT INCLUDE- (1) A HOUSE MEANT EXCLUSIVELY FOR RESIDENTIAL PURPO SES AND WHICH IS ALLOTTED BY A COMPANY TO AN EMPLOYEE OR AN OFFICER OR DIRECTOR WHO IS IN WHOLE-TIME EMPLOYMENT HAVING A GROSS ANNUAL SALARY OF LESS THAN TWO LAKH RUPEES; (2) ANY HOUSE FOR RESIDENTIAL OR COMMERCIAL PURPOSE S WHICH FORMS PART OF STOCK-IN-TRADE; (3) ANY HOUSE WHICH THE ASSESSEE MAY OCCUPY FOR THE PURPOSES OF ANY BUSINESS OR PROFESSION CARRIED ON B Y HIM. AFTER THE SUBSTITUTION THE SAID CLAUSE STOOD AS UND ER: (I) ANY BUILDING OR LAND APPURTENANT THERETO (HERE INAFTER REFERRED TO AS HOUSE) WHETHER USED FOR RESIDENTIAL OR COMMERC IAL PURPOSES OR FOR THE PURPOSE OF MAINTAINING A GUEST HOUSE OR OTH ERWISE INCLUDING A FARM HOUSE SITUATED WITHIN TWENTY-FIVE KILOMETER S FROM LOCAL LIMITS OF ANY MUNICIPALITY (WHETHER KNOWN AS MUNICIPALITY MUNICIPAL CORPORATION OR BY ANY OTHER NAME) OR A CANTONMENT B OARD BUT DOES NOT INCLUDE (1) A HOUSE MEANT EXCLUSIVELY FOR RESIDENTIAL PURPO SES AND WHICH IS ALLOTTED BY A COMPANY TO AN EMPLOYEE OR AN OFFICER OR A DIRECTOR WHO IS IN WHOLE-TIME EMPLOYMENT HAVING A GROSS ANNUAL SALARY OR LESS THAN FIVE LAKH RUPEES; S2047-8 & WTA 41/MDS/10. 20 (2) ANY HOUSE FOR RESIDENTIAL OR COMMERCIAL PURPOSE S WHICH FORMS PART OF STOCK-IN-TRADE; (3) ANY HOUSE WHICH THE ASSESSEE MAY OCCUPY FOR THE PURPOSES OF ANY BUSINESS OR PROFESSION CARRIED ON B Y HIM; (4) ANY RESIDENTIAL PROPERTY THAT HAS BEEN LET OUT FOR A MINIMUM PERIOD OF THREE HUNDRED DAYS IN THE PREVIOU S YEAR; (5) ANY PROPERTY IN THE NATURE OF COMMERCIAL ESTAB LISHMENTS OR COMPLEXES. :WHEN THERE IS A SUBSTITUTION OF A CLAUSE AND WHEN LEGISLATURE SPECIFICALLY STATED THE SUBSTITUTION TO HAVE EFFECT FROM 01-04-1 999 IN OUR OPINION SUCH SUBSTITUTION CANNOT BE CONSTRUED AS RETROSPECTIVE. IT IS NOT AN AMENDMENT ADDING AN EXPLANATION OR MAKING A CLARIFICATION. PR IOR TO SUCH SUBSTITUTION AN ASSET DEFINITELY INCLUDED ANY BUILDING OR LAND W HETHER USED FOR RESIDENTIAL OR COMMERCIAL PURPOSES. EXCLUSION OF PR OPERTIES IN THE NATURE OF COMMERCIAL ESTABLISHMENT AND COMPLEXES CAME IN ONLY AFTER THE SUBSTITUTION MADE THROUGH FINANCE (NO.2) ACT 1998 WHICH CAME INTO EFFECT ON 01-04-1999.. SO WE CANNOT ACCEPT THE VIEW OF THE CWT(A) THAT COMMERCIAL ESTABLISHMENT WAS EXCLUDED FROM THE TERM ASSET EVEN FOR AY 1998-99. THEREFORE THE FACTORY LAND AND BUILDING O F THE ASSESSEE RENTED OUT BY IT WAS CERTAINLY A COMMERCIAL ESTABLISHMENT AND HAD TO BE INCLUDED AS A PART OF ITS ASSETS FOR THE PURPOSE OF WEALTH-T AX ACT FOR THE IMPUGNED ASSESSMENT YEAR. THEREFORE WE SET ASIDE THE ORDER OF CWT(A) IN THIS S2047-8 & WTA 41/MDS/10. 21 REGARD AND REINSTATE THE ADDITION MADE BY AO. APPEA L OF THE REVENUE STANDS ALLOWED. 34. TO SUMMARISE THE RESULT ALL THE APPEALS OF THE REVENUE STAND ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 25 - 02-2011. SD/- SD/- (U.B.S.BEDI) JUDICIAL MEMBER (ABRAHAM P.GEORGE) ACCOUNTANT MEMBER CHENNAI: 25TH FEBRUARY 2011. NBR CC: ASSESSEE/ ASSESSING OFFICER/ CIT(A)/ CIT/ D .R/ GUARD FILE.