Aircraft Owned & used by Assessee for travel of its Directors exempt from wealth Tax

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HIGH COURT OF DELHI AT NEW DELHI

Judgment reserved on : 03rd July, 2013

Judgment pronounced on: 1 1th July, 2013

WTA 1/2013

COMMISSIONER OF WEALTH TAX

versus

JAY PEE VENTURES LTD

 

The use of an aircraft for commercial purposes does not necessarily entail hiring to third parties, ferrying of passengers or leasing of the aircrafts for consideration. The intention of the legislature while creating the exception by using the expression “used by the Assessee for commercial purposes” was not to restrict the meaning of the words ‘commercial purposes’ to running the same on hire or as stock in trade.

The use of an aircraft by the executives or directors of a company for the purposes connected with its business would amount to use by the Assessee for commercial purposes. In case the Assessee was using the aircrafts for transporting its directors or executives for excursion purposes or for personal purposes the same would not qualify as use of the aircraft for commercial purposes and would not be exempt from wealth tax. In the present case the ITAT has recorded that it is undisputed that the two aircrafts were used by the Assessee for its business. Since this is the undisputed factual position, the same would be exempt from wealth tax.