ORDER
Mukul Shrawat, Judicial Member
1. The Assessee is in appeal arising out of the consolidated order of CIT(A)-Central-I, Mumbai dated 16-1-98 against the confirmation of an addition of Rs. 11,72,000 being the value of which Jeep and Omni Buses and value of Rs. 51,41,000 in respect of guest house for the assessment years 1993-94 and also for the assessment year 1994-95, value of Jeeps and Omni Buses confirmed at Rs. 13,93,385 and value of Guest House at Rs. 51,41,000.
2. In the assessment year 1993-94 as per order under Section 16(3) dated 7-3-1996 the W.T.O. has valued Jeeps and Maruti Vans at Rs. 11,72,000 and valued Guest House at Rs. 51,41,000. For the assessment year 1994-95 as per order under Section 16(3) dated 26-3-1997 the value of vehicles was at Rs. 13,93,385 and value of Guest House at Rs. 52,54,309.
3. Regarding automobiles ie., Jeeps and Maruti Vans the assessee has not included the value of the same in its statement of wealth claiming that the Wealth Tax Act provides taxability in connection of Motor Cars and not in connection of Jeeps or Omni Buses. The Jeeps and Omni Buses, as per the assessee, do not come under the specification of Motor Cars, hence not to be included in the assets of the assessee. However W.T.O. has not agreed with this contention of the assessee and observed that the Hon’ble Madras High Court in the case of Crompton Engg. Co. (Madras) Ltd. v. CIT [1992] 193 ITR 483 (Mad.) in a very clear and unequivocal terms held that jeep is a motor car. Maruti Van is also used for conveyance of passengers and in its use it is more akin to the motor car then the Jeep. There is therefore no logic to exclude the Maruti vans from the definition of motor car for the purpose of Wealth Tax. Considering these facts, the market value of the jeeps and Maruti Vans owned by the assessee is considered for computation of net wealth of the assessee. The market value of such Jeeps and Maruti Van as on 31-3-93 as per the valuation reports furnished by the assessee worked out to Rs. 11,72,000 which had been added to net wealth of the assessee.
4. Regarding valuation of immovable property consisting various houses in accordance to assessee’s computation, same were not chargeable to wealth tax as the same were claimed as not guest house but simply transit houses. The assessee was asked to furnish the valuation report, during the course of assessment proceedings, in respect of the transit houses owned by it. The assessee has furnished value of transit houses situated at Rajshree Cement and White Cement Division at Rs. 24,21,427, worked out at cost basis, however, no valuation report was furnished. The WTO enhanced the value of transit houses situated at Rajshree Cement at Rs. 34 lakhs and rest of the transit houses at Rs. 17,41,000, hence worked out total value at Rs. 51,41,000.
5. In the subsequent order i.e. assessment year 1994-95 the value of Jeeps and Maruti Vans was determined at Rs. 13,93,000 and the value of transit houses (Guest Houses) was determined at Rs. 52,54,309. The assessee has challenged these orders, however, in first appeal the ld. CWT(A) was not convinced with the argument of the assessee and confirmed the value of automobiles as assessed by the W.T.O. in respect of both the above referred assessment orders, however, while deciding the value of immovable property for the assessment year 1994-95 it was adopted at the same value as confirmed in the assessment year 1993-94 i.e. Rs. 51,41,000 as against the value assessed by W.T.O. at Rs. 52,54,309. While considering the assessability of Jeeps and Maruti Vans 1d. CWT(A) has discussed the same in detail and observed as follows :
2. After due consideration, I do not find any force in the plea of the appellant, that the Jeeps and Maruti Vans were not covered within the meaning of Motor-cars. This issue has been discussed in detail by the Assessing Officer in paras (3) & (4) of the assessment order. In his support the Assessing Officer has placed reliance on the following judicial authorities:
(i) Balanoor Tea & Rubber Co. Ltd. v. State of Kerala [1994] 207 ITR 501 (Ker.)
(ii) CAIT v. Good Hope Enterprises [1992] 197 ITR 236 (Ker.)
(iii) Crompton Engg. Co. (Madras) Ltd.’s case (supra); and
(iv) CAIT v. Good Hope Plantation [1988] 170 ITR 173 (Ker.).
It has been held by the Hon’ble Madras High Court in the case of Crompton Engg. Co. (Madras) Ltd. v. C.I.T. (supra) in a very clear and unequivocal terms that jeep is a motor-car. Maruti van is also used for transportation of passengers and in its use it is more akin to the motorcar than the jeep. Thus, there is no logic as to why the value of Maruti Vans & Jeeps etc. should be excluded from the definition of Motor-car for the purpose of Wealth-tax.
Being aggrieved, now the assessee is in appeal before us.
6. On behalf of the assessee 1d. A.R. Shri Arvind Sonde has vehemently argued that under Motor Vehicles Act, 1988 there is a definite distinction between Omni Bus and Jeep vis-a-vis with Motor Car. According to him the said Act provides that “Motor Car” means any motor vehicle other than a transport vehicle, Omni Bus, Road Roller, Motor Cycle, Tractor or any other carriage. Hence Omni Bus is a transport vehicle other than a Motor Car. He has also pointed out that as per Section 2 of Definition to Sub-section-29 of Motor Vehicles Act” Omni Bus” means any motor vehicle contracted or adopted to carry more than six persons excluding the driver. He has also pointed out that as per the statement of wealth filed along with return, photocopy placed before us as per paper book page-13013, the assessee has since beginning was claiming that the various transit houses were meant for the stay of employees when they visit company’s factories or various offices in various sites. These transit houses were used by the employees and not for the guest, therefore, not to be termed as Guest House. Likewise regarding taxability of vehicles, as per 1d. A.R. it was specifically mentioned in the computation of net wealth that since Jeep and Omni Buses were not motor cars the same have not been considered in the computation of net wealth.
7. Ld. D.R. has referred the definition of assets as enumerated in Section 2(ea)(ii) of W.T Act mentioning about only Motor Cars (other than those used by the assessee in the business of running them on hire or as stock in trade) without giving any distinction of Omni Bus or Jeeps. According to him a Motor Car is an automobile operating on gasolene of every kind. Since the Act has not made any distinction, therefore, the same is liable to be taxed as has been done by the Assessing Officer and confirmed by the ld. CIT(A).
8. We have thoroughly heard the submissions of both the sides and also perused the orders of the authorities below. We have also gone through the contents of the paper book consisting valuation report of Guest House, list of Jeeps and Omni Buses as well as details of transit houses of both the assessment years under consideration before us.
9. To decide assessability of vehicles consisting Jeep and Maruti Vans in the hands of the assessee one has to look into the nature of an asset and its usage. As per the list filed on pages 14 & 17 of paper book giving list of Jeep and Omni Buses, as on 31-3-1993 and 31-3-1994 the value shown by the assessee was at Rs. 11,72,000 and Rs. 13,93,385 respectively. As per the list under the heading type of cars the vehicles are mentioned as Jeep, Mahindra Mini Bus, Mahindra Jeep, H.M. trucker, and Omni Bus. The claim of the assessee was that this type of vehicles are not termed as motor car, therefore, he has not included the value of Jeeps and Omni Buses etc. in the declared wealth of the assessee. The arguments of the assessee is that those vehicles are meant to carry more than six persons including the driver, hence do not come under the definition of Motor Car. The assessee is taking & shelter of Motor Vehicle Act, 1988 under the section of “Definition” 2(26) (motor car means any motor vehicle other than transport vehicle, Omni Bus, Road Roller, Tractor, Motor Cycle or invalid carriage). According to assessee the Motor Vehicle Act has provision of different cess on motor car and the vehicle having carrying capacity of more than six passengers. On this logic the assessee has claimed the exemption of these automobiles from the preview of W.T. Act.
10. Before we discuss the provisions of W.T. Act and related provisions of IT. Act, at the outset, we definitely want to put forth that once a provision is borrowed from any other enactment the interpretation of the provision under the parent Act is always relevant and previous and the borrowed provisions has to be interpreted in accordance with the provisions of the parent Act, i.e., the W.T. Act and the assessee is trying to borrow an enactment from Motor Vehicle Act ignoring the basic legal fact that in the parent W.T. Act as well Income-tax Act the Motor Cars have definitely defined and taxed accordingly. As per Webster’s Dictionary a Motor Car is an automobile which produces motion through the help of internet compression engine operating on gasoline. The W.T. Act has not made any distinction and under the definition of “assets” as per Section 2(ea)(ii) motor cars are subject to tax other than those used by the assessee in the business of running them on hire or as stock in trade. To substantiate the definition of assets as per W.T. Act the corresponding provision as per I.T. Act as per the table of depreciation provided in Rule-5, Appendix-1 the depreciation of Motor Cars is at uniform rate and the definition is only if motor buses, motor lorries, motor taxies are used in a business of running them on hire. The assessee’s case is not that the vehicles in question have been used in business of running them on hire, rather the same were part and parcel of the assessee company. The view expressed by us as above find support of various judicial pronouncements where clearly and in unequivocal terms it was affirmed while deciding the issue of depreciation that there is no such distinction about motor cars as claimed herein by the assessee. In the case of Balanoor Tea and Rubber Co. Ltd. v. State of Kerala [1994] 207 ITR 501, Kerala High Court has held that the expression of “motor car” includes a “Jeep” for the purpose of deduction of depreciation. Further while deciding the issue of taxability of Jeep as per Section-40(3)(vii) of the Finance Act, 1983, it was held by ITAT, Pune Bench in the case of Rajathdri Hotel (P.) Ltd. v. WTO [1995] 54 ITD 579 that jeeps are motor car within the meaning of this section, therefore, their value was held to be liable for wealth tax. In view of the various legal pronouncement and the decision cited above as well as the factual position as narrated above we do not find ourselves in agreement with the arguments of the 1d. A.R and hereby confirm the view taken by the authorities below.
11. Apropos assessability of transit house a detail on page Nos. 15 & 18 of the paper book as on 31-3-1993 and 31-3-1994 has been filed before us showing value of Rs. 41,62,427 and Rs. 42,80,324 respectively. The assessee’s contention was that the market value of such transit houses located at Rajshree Cement Unit at Mumbai and White Cement Division was not chargeable to Wealth Tax since such Transit Houses could not be termed as Guest Houses. The Assessing Officer has observed that these transit houses were not used by the assessee as Holiday Homes exclusively for its employees, therefore, they are to be considered as Guest House only as has been decided in the Income-tax assessment of the assessee for the purpose of disallowing expenditure under Section 37(4) of the I.T. Act. Hence for assessment year 1993-94 the value was assessed at Rs. 51,41,000 and for the assessment year 1994-95 at Rs. 52,54,309 however, the ld. CWT(A) has adopted a uniform view and for both the assessment years now under consideration he has directed the W.T.O. to adopt the same value i.e. Rs. 51,41,000. The contention of 1d. A.R. before us was that the company is having various transit houses for the stay of its employees when they visit either company’s factories or to various offices located in various sites. He has further stressed that the term “Guest House” is not defined in the Wealth-tax Act, the Guest House had to be treated as normally understood in common parlance for the purpose of W.T. Act. Hence he has concluded that these transit houses being for the use of the employees are not Guest Houses, therefore, not chargeable under W.T. Act. His alternative plea was that without prejudice to the above arguments the assessee has given the details of valuation of transit houses reflecting value of Rs. 41,62,427 and Rs. 42,80,324 for the assessment years 1993-94 & 1994-95 is to be adopted because the WTO has estimated the value of transit houses situated at Rajshree Cement & White Cement Division at Rs. 34.00 lakhs. This estimation and approximation at 40% high is purely on imaginary basis, however, on the other hand, the assessee has adopted cost price or the value as per Valuation Report, which ought to have been taken for Wealth-tax purpose.
12. Section 40(3)(via) provides any building used as residential accommodation in the nature of Guest House and land appurtenant thereto are assessed as referred to in the section. The term Guest House has been well defined and considered under the I.T. Act and there is no ambiguity about the same. However, on the other hand, the term transit house is conspicious. It was held that an accommodation maintained by the assessee company for its Director and other employees or Officers on tour in connection with the assessee’s business, then the said accommodation can be called a “Guest House” Schradar Scovill Duncan Ltd. v. ITO [1986] 16 ITD 18 (Bom.) (SB). Likewise in the case of CIT v. West Coast Paper Mills Ltd. [1992] 193 ITR 349 (Bom.) it was held that Rest House and a Guest House means the same thing. After looking into the provisions of Section 40 of WT Act and taking into account the ratio laid down in various judicial pronouncement, we are of the firm view that the W.T.O. has rightly held that the value or these properties is to be assessed in the hands of the assessee. However, from the details placed on the paper book, referred above, and the Valuation Reports submitted, we have found that as on 31-3-1993 the value of these properties situated at units Rajshree Cement and White Cement Division was declared at Rs. 24,21,427 on the basis of cost price. Regarding properties situated at H.C.M. and Rayon Division at Vearaval the Value was declared as per the Valuation Report at Rs. 17,41,000. We have found that the Assessing Officer has estimated the value of the property which was declared at cost price situated at Rajshree Cement and White Cement Division at Rs. 34 lakhs on estimate basis as against the declared value of Rs. 24,21,427. Since the Assessing Officer has not given any sufficient cogent reason and 1d. CIT(A) has also made an estimation in respect of both the assessment years, therefore, in our view the value of these properties has to be taxed in the hands of the assessee as declared by the assessee before us at Rs. 41,62,427 and Rs. 42,80,324 for the assessment years 1993-94 and 1994-95 respectively.
We direct accordingly and the order of ld. CWT (A) is modified to this extent and the rest is confirmed.
13. In the result, the appeals of the assessee are partly allowed, as directed above.