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wealth tax

(Querist) 21 December 2009 This query is : Resolved 

2(ea)(iv)yachts,boats and aircrafts (other than those used by the assessee for commercial purposes)

whether commercial purpose would mean only stock in trade+business use++if such asset is used by directors/MD of companies to discuss business deals?

my ? wht wil be assets & what will not be assets?

pls answer urgently..thanks in advance
dasd (Querist) 21 December 2009
Raj Kumar Makkad (Expert) 22 December 2009
In the given matter, if vessel is used for the promotion of business even by MD/Director etc. even then it is assessable as for commercial purpose and it shall be asset.
soumitra basu (Expert) 22 December 2009
If all the assets own by company, properly accounted for and used for the purpose of business either by the staff or by the Directors shall be treated as used for the purpose of commercial business.
Vineet (Expert) 22 December 2009
There are divergent views on the issue whether "Commercial Purpose" would also include 'Business Purpose".

The ITAT Mumbai Bench, comparing this provision vis a vis provisions of section 2(ea)(ii) wherein in respect of Motor Cars it is specifically mentioned "Business of Running Them on Hire or Stock in trade", has held that legislative intent while putting restriction 'Commercial Purpose" was not that such assets be commercially exploited by letting them on hire. So it was held utilising these assets in furtherance of business without any personal use is sufficient as Commercial Use and in such circumstances, Yatch, Boat, Aircraft are not to be considered as Asset for taxable wealth.
Ref Garware Wall Ropes Ltd (89ITD221)

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