Wealth tax--

----Reference---Investment in incomplete and unfinished factory building-- Tribunal justified in holding that value could not be included in total wealth of assessee--No question of law arose---Indian Wealth Tax Act, 1.957-- Indian Finance Act, 1983, S. 40(3)(vi).

Held, dismissing the application for reference that in order to attract the applicability of section 40(3)(vi) of the Finance Act, 1983, the building or part thereof must be capable of being used by the assessee. The facts as found and the question itself suggested that the investment was in an incomplete and unfinished factory building, the construction whereof was still in progress. It was not the case of the Revenue that the building or part thereof as it stood in the relevant assessment year was capable of being subjected to any use by the assessee. Obviously, the building or part thereof was not covered by clause (vi) above-said. The answer to the question was obvious. The Tribunal was correct in holding that the investment was not liable to be included in the wealth of the assessee-company. No question of law arose from its order.

R. D. Jolly for Petitioner.

Sanjeev Rajpal for Respondent.

JUDGMENT

This is a petition under 27(3) of the Wealth Tax Act, 1957, arising out of the assessment year 1987-88 whereby the Revenue seeks a mandamus to the Tribunal for drawing up a statement of case and referring the following question for the opinion of the High Court:

"Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was correct in law in holding that the investment of Rs.14,91,874 in an incomplete and unfinished .factory building is not liable to be included in the wealth of the assessee-company?"

The question calls for interpretation of section 40 of the Finance Act, 1983. The assessee was constructing a building. The value of investment made therein was sought to be included in the assessable wealth of the assessee. Section 40(3)(vi) which is relevant for our purpose reads as under:

"(3) The assets referred to in subsection (2) shall be following, namely:--...

(vi) building or land appurtenant thereto, other than building or part thereof used by the assessee as factory, godown, warehouse, hotel or office for the purposes of its business, or as residential accommodation for its employees or as a hospital, creche, school, canteen, library, recreational center, shelter, rest-room or lunch room mainly for the welfare of its employees and the land appurtenant to such building or part;"

To attract the applicability of the abovesaid clause the building or part thereof must be capable of being used by the assessee. The facts as found and the question itself suggest that the investment was in an incomplete and unfinished factory building, the construction whereof was still in progress. It is 'not the case of the Revenue that the building or part thereof as it stood in the relevant assessment year was capable of being subjected to any use by the assessee. Obviously, the building or part thereof is not covered by clause (vi), abovesaid. The answer to the question is obvious. The Tribunal did not err in refusing to make a reference to the High Court. The petition under section 27(3) of the Wealth Tax Act, is without any merit and is, therefore, dismissed.

M.B.A./4239/FCPetition dismissed.