Let out portions do not come under any of specified assets.

(Reference under Section 27(3) of the Wealth-tax Act, by Income Tax Appellate Tribunal, Madras, 'D' Bench in W.T.A. Nos.102, 192(Mds)/90 and 357 & 206(Mds)/1991 dated 27.01.1993, for the assessment years 1984-85 and 1985-86. )

P.P.S. Janarthana Raja, J.

Income Tax Appellate Tribunal (hereinafter referred to as the "Tribunal"), Madras, 'D' Bench referred the matter under Section 27(3) of the Wealth-tax Act, as per the direction of this Court in T.C.P. Nos.202 to 205/97 dated 08.09.1998, for opinion of this Court.

2. The facts leading to the above tax cases are as under:

i) The assessee is a company in which the public are substantially interested. It is a closely held company. The relevant assessment years are 1984-85 and 1985-86 and the corresponding valuation dates are 31.03.1984 and 31.03.1985. The issue involved in these appeals relate to the assessment of multi storeyed building belonging to the assessee company. The property is at No.26, Commander-in-Chief Road, Chennai consisting of land to an extent of 26.65 grounds with a six storeyed building on a built-up area of 469 Sq.M. There is also another old building of 818 Sq.M. at the back. Of the total area of 26.65 grounds, an extent of 10.52 grounds had been taken as land appurtenant to the main building and the balance of 16.3 grounds was treated as vacant land. The building is partly used by the assessee company for its own business and partly let out to various tenants. The Wealth-tax Officer excluded a part of the main building occupied by the assessee for its own business and assessed the rest of the property to wealth-tax. He also rejected the claim of the assessee that the entire building must be exempted as a building used in the business of the assessee.

ii) Aggrieved by the order, the assessee filed an appeal to the Commissioner of Income Tax (Appeals). The C.I.T.(A) upheld the view taken by the Assessing Officer, but granted certain relief which are as follows:

a) Liabilities to be allowed in computing the net wealth.

b) A reduction of 15% in the value of the property due to restricted marketability.

c) Exclusion of the portion of the land appurtenant to the building which was used in the business.

Aggrieved by the order of the C.I.T.(A), further appeals were preferred by the Revenue as well as by the assessee. The Tribunal held that the tenanted portion of the new building was also used in the assessee's business and therefore excluded from the operation of Section 40 of the Finance Act, 1983. The Tribunal also confirmed the order of the C.I.T.(A) on the reliefs granted by the C.I.T.(A), from the value of the property and the Tribunal referred the following questions of law at the direction of this Court.

"1. Whether on facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the tenanted portion of the property at No.26, Commander in Chief Road was used in the assessee's business and was, therefore, excludible from the operation of Section 40 of the Finance Act, 1983?

2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the advance amounts of rental deposits, electricity deposit, water tax and generator deposits, etc., were to be allowed as liabilities in computing the net wealth of the assessee?

3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in confirming the orders of the Commissioner of Income-tax (Appeals) regarding exclusion of land appurtenant to the building and reduction of market value of the property on account of restricted marketability?"

3. Eventhough there are three questions referred to this Court, we are concerned with Question No.1 alone. The said Question No.1 arising for consideration in the reference, appears to be covered by the Division Bench judgment of this Court consisting of Justice P.D.Dinakaran and Justice K.Raviraja Pandian dated 22.09.2004 in Tax Case No.207 and 208 of