ORDER
K.P.T. Thangal, J.M.
These appeals are by the assessee and pertains to assessment years 1998-99,1999-2000 and 2000-01. Since common grounds are involved in all these appeals, we dispose of the appeals by this consolidated order for the sake of convenience.
2. The common grounds urged by the assessee for all the years reads as under:
“1. That the learned CWT (A) ought to have accepted the claim of the assessee that the two flats are used for the purpose of business of assessee and consequently not chargeable to wealth tax;
2. That immovable property belong NCPA Flat and Embassy Flat are not assets chargeable to tax within the meaning of provisions of section 2(ea) of Wealth Tax Act, 1957;
3. The assessment to wealth tax in respect of value of NCPA Flat and Embassy Flat is unjustified, unwarranted and excessive.”
3. The facts briefly are as under. Assessee filed the original return on 20-3-2002 declaring net wealth at Rs. 4,86,400 for the assessment year 1998-99, Rs. 5,52,600 for assessment year 1999-2000 and Rs. 4,45,500 for assessment year 2000-01. While framing the assessment order, assessing officer noticed the wealth declared by the assessee was with regard to the vehicles owned by the assessee and assessee claimed exemption in respect of two residential flats having address at 191, NCPA, Dorabji Tata Road, Mumbai – 400 021 and other being Flat No. 12A, Ist Floor, Embassy Apartments, Napean Sea Road, Mumbai. The claim of the assessee was that NCPA and Embassy flats are not taxable to wealth tax as, according to the assessee, it was business assets and hence does not fall within the ambit of section 2(ea) of the Wealth Tax Act. Assessee contended that subsection (3) of section 2(ea) exempts any house property by the assessee for the purpose of any business or profession carried on by him within the ambit of property that falls taxable under the Wealth Tax Act, 1957. The assessing officer however, disallowed assessee’s claim for the reason that though the assessee claimed that these are business assets, the assessee has not filed any details with regard to the meetings. the date and time of the meetings, the persons participated in the meetings, the agenda for discussion, the minutes of the meetings, etc. were not produced, he held that the mere submission that the flats has been used as business assets is not sufficient. Assessing officer further noted that the assessee does not have any staff of its rolls who were stated to be occupying the flats for business purpose. He further noted no details with regard to electricity bills and telephone bills have been filed. He further noted that identical issue arose in the case of M/s. Standard Distilleries & Breweries (P) Ltd. in which the CIT (Appeals) passed order No. CIT (A)/Centr-VII/ROT-33, 2001-2002 dated 30-10-2002 and the decision went against the assessee. He further held the provisions of Wealth Tax Act are vastly different from income-tax provisions. He held that “any house which the assessee may occupy for the purpose of any business or profession carried on by him” is not liable to wealth-tax, the words used are “occupy for the purpose of business or profession’ has not been proved by the assessee. Mere assertion that the house is occupied by the assessee for the purpose of business or profession is not sufficient. The claim of the assessee was thus rejected by the learned assessing officer. Aggrieved by the above order. the assessee approached the first appellate authority.
4. The CIT(A) asked the assessee to prove with proper documents that the flats were used in fact for the business purpose to claim exemption under the Wealth Tax Act. The CIT(A) also requested the assessee to prove the occupation aspect little more emphatically, but CIT(A) records unfortunately the same could not be done by the assessee even at the first appellate stage. The CIT (A) further notes that the assessee himself has offered the two assets in the assessment year 1998-99 for the purpose of wealth tax. He records further that the assessee could not explain as to why once having considered the same property for the purpose of wealth tax, assessee withdrew the claim and claimed exemption for subsequent years. Assessee’s claim was rejected by the CIT(A). Aggrieved by the above order, assessee is in appeal before the Tribunal.
5. Assessee’s representative submitted assets for the purpose of wealth-tax includes property of every description movable or immovable, but does not include any house which the assessee may occupy for the purpose of any business or profession carried on by him in the light of section 2(ea)(3). Inviting our attention to the decision of the learned first appellate authority in the case of Standard Distilleries and Breweries (P) Ltd. dated 30-10-2002 mentioned by the learned first appellate authority, assessee’s representative submitted this decision cannot be applied in the instant case for the years under consideration. Assessee’s representative submitted that CIT(A) came to the above conclusion mainly on the ground that the assessee in that case has not carried on any business during the previous year relevant to assessment year under appeal. Inviting our attention to paperbook pages 34 and 35 para 11, assessee’s representative submitted in the income tax appellate order dated 19-9-2003 in the assessee’s own case for the assessment year 1998-99, CIT(A) clearly records that certain evidences were produced before the assessing officer, but he disbelieved it. The evidences produced were telephone bills and electricity bills. Assessee also produced evidence with regard to repair and maintenance expenses, insurance charges, house taxes etc. and these claims were allowed by the CIT(A) as legitimate business expenditure claimed and while coming to the above conclusion he particularly noted that the assessing officer himself has allowed these claims as business expenditure. For this reason, the depreciation was allowed vide para 12 of his order for the assessment year 1998-99 under income-tax proceedings. Assessee’s representative submitted the observation of the CIT(A) that flat should be substantively occupied by the assessee for business purpose is not the requirement of provisions of law. He further submitted that finding of the CIT(A) that the assessee itself has shown the two flats chargeable to wealth-tax is factually incorrect. He further submitted that the assessing officer has not assessed income from house property for the above flats itself supports the case of the assessee that the flat is occupied by the assessee for business purpose. Assessing officer himself has allowed, as mentioned above, electricity expenses and telephone expenses for NCPA and Embassy Flats while computing income from business. Assessee also relied on the decision of the Tribunal Ahmedabad Bench in the case of National Dairy Development Board v. Dy. CIT (2000) 75 ITD 447 (Ahmed) Assessee’s representative further submitted that the assessee has used these flats for business purpose and for no other purpose. It is for the assessee to decide as to how the property should be occupied. Assessing officer has also not found that it was occupied for any purpose other than business. It is submitted even if the assessee has taken the possession and kept for use, it falls within the exclusion contemplated under section 2(ea)(3) of the Wealth Tax Act, because the meaning of “occupy” means to take possession, to hold or keep for use.
6. Assessee’s representative relying upon the decision of the Honble Supreme Court in the case of CIT v. Ajax Products Ltd. (1965) 55 ITR 741 (SC) submitted the subject is not to be taxed unless the charging provision clearly imposes the obligation.
7. The learned Departmental Representative supported the order of the revenue authorities and submitted the word “occupy” used in section 2(ea)(3) means substantial activity. In other words, it should be substantively occupied by the assessee for the purpose of business activities. The very use or keeping it ready for business purpose is not sufficient and it cannot be said that it is one occupied for business purpose. Assessee has not produced the any evidence to show that these assets have been used for business purpose. Normally a flat is a residential area or atleast in the instant case the flat is in residential area and therefore presumably it is a residential flat not used for business purpose.
8. We heard the rival submissions and gone through the orders of the revenue authorities. The word “occupy” according to Chambers 20th Century Dictionary (Revised Edn4th) means to take possession of, to capture, to hold or being in possession, to take up as a space, time, etc. According to Websters New International Dictionary, Edn. 1996/ Vol.II, the word “occupy” means to take possession of, occupy, employ or modify, etc. In other words, according to assessee, if the flat is kept ready or taken possession for business purpose, that itself is sufficient to make it a business asset.
9. The decision relied on by the learned CIT (A) in the case of M/s. Standard Breweries & Distilleries (P) Ltd. (associated concern), as rightly contended by the assessee’s representative is distinguishable on facts. That decision is given at page 12-15 of the paperbook. As hereinabove noted, the decision went against the assessee in that case mainly because assessee has not carried out any business during the previous year relevant to assessment year. But coming to the instant case of the assessee, there is a specific finding by the assessing officer himself that the flats were used by the assessee for business meetings. The assessing officer disallowed assessee’s claim that this is a business asset and he further held that a mere fact that certain meetings were held does not prove that the house is occupied for the purpose of business or profession. From the above, it is clear that the assets were used for business purpose, but it is difficult to hold that the assets should be used for business purpose throughout the year. There is nothing on record to show that these assets were held not for any purpose other than business. The mere fact that the flat is in the residential area alone cannot be taken as evidence that it is not a business asset. The assessing officer has granted depreciation in the Income-tax proceedings for the flats as it has been used for business purpose by the assessee. The finding of the assessing officer that the assessee itself has offered the two flats for the wealth-tax purposes, the learned counsel submitted is incorrect.
10. A perusal of section 2(ea)(3) makes it clear that the continuous occupation and usage of the house for business purpose is not necessary to get exemption. Section 2(ea)(3) reads as any house which the assessee may occupy for the purpose of any business or profession carried on by him”. The words used is ‘may occupy’. Necessarily this means even if the house is kept ready for business purpose, the house is entitled for exemption. The stand of the revenue is that as far as wealth-tax assessment is concerned, the word”occupy” should be interpreted in a restricted way. The order of the CIT(A) reads as under :- “The word that has been used under Wealth Tax Act is much more emphatic much more specific and to that extent the onus on the assessee is much more onerous. In that connection the assessing officer had asked the assessee to prove the issue of occupation for the purposes of business with very strong unimpeachable evidence and that could not be done at the end of the assessee. It was one of the submission of the assessee before the CIT (A) in the income-tax matter for assessment year 1998-99 that assessing officer has not given any reason or conducted any enquiry to come, to the conclusion that the property was not used for business purposes. The relevant para reads as under:’
“11. It is not the case of assessing officer that it had made any inquiry to come to a finding contrary to what has been asserted. What was in fact done was that the assessing officer disbelieved evidence produced on this issue. Further more, the assessee had enclosed telephone bill, electricity bill of the building owned by the assessee. The repair and maintenance expenses of the aforesaid flat was also been paid by the assessee, the insurance charges, house taxes have also been paid. All these expenditures has been as legitimate business expenditures for the year concerned by the same assessing officer. It is further submitted that sufficient evidence are available on record to justify the claim of depreciation of the assessee. The assessee also placed reliance on the decision of my learned predecessor in.the case of sister concern M/s. BDA Ltd. where in on identical circumstances in case of a similar flat of the said building the claim of the said M/s. BDA Ltd. was allowed for assessment year 1996-97, assessment year 1997-98. It was further submitted that on similar circumstances my learned predecessor had also considered. that the claim can be allowed even in case of passive use by the assessee. Reliance was particularly placed on the decision of Punjab & Haryana High Court in CITv. O.P. Khanna &Sons (10 Taxman 243) being almost on identical ground, where asset concerned was a factory building. Reliance was placed on the following decisions to support the proposition by the assessee. The decisions; are:
(i) 5 ITR 621 (Bom.)
(ii) 49 ITR 177 (All.)
11. There was a clear find that all the expenditure claimed by the assessee was allowed as legitimate business expenditure for that year in the CIT(A) order. In other words, the revenue authorities are accepting that the flats were business assets. A reading of the above reproduced portion will also make clear that no reason is given why the evidences produced ‘ by way of telephone bill, electricity bill, repair and maintenance expenses which were allowed as business expenses were not considered, while considering the issue for wealth-tax purposes. The words ‘may occupy’in section 2(ea)(3) does not indicate a continuous unbroken usage. The word used in the section as indicated above is ‘any house which the assessee may occupy for the purpose of business….’ gives an impression that uninterrupted occupation of the property is not necessary to make an asset as business asset. In National Diary Development Board case (supra), the Ahmedabad Bench of the Tribunal held, a hostel owned by NDDB used to provide temporary accommodation for duration of training programmes to employees could be treated as a business asset. This decision supports assessee’s case. If a place is used for conducting meetings as claimed by the assessee, which is also not disbelieved by the revenue, is sufficient to treat the property as business asset. Assessee had discharged the primary onus of proving that the property is used for business purpose. It is for the revenue to disprove it. In our view, the finding of the assessing officer that “mere fact that certain meetings were held does not prove that house is occupied for business purpose or profession’ is an observation devoid of merits.
12. In the case of Ajax Products Ltd (supra) the Honble Supreme Court held, subject is not to be taxed unless the charging provisions clearly imposes the obligation. Even the benefit of doubt has to go in assessee’s favour. The fact that in the income-tax assessment for all these years under consideration, the expenditure claimed by the assessee by way of telephone bill, maintenance cost, etc., has been allowed by the revenue. Under these circumstances, the denial of the same when it comes to wealth-tax purposes, is devoid of merits.
13. The appeals by the assessee are allowed.