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Wealth-tax - Case Laws
Showing 1 to 20 of 3697 Records
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2024 (1) TMI 439 - RAJASTHAN HIGH COURT
Revision petition u/s 25 of the Wealth Tax Act - Commissioner, Wealth Tax, Udaipur held that the revisions u/s 25 of the Wealth Tax Act against the intimation issued under Section 16(1) of the Act of 1957 is not an order, and therefore, the revision petitions under Section 25 of the Act of 1957 were not maintainable - HELD THAT:- As intimation order was passed under Section 16(1), the appeal lay under Sections 23 & 23A of the Act of 1957 and the revisionary powers were specified under Section 25 of the Act of 1957. Such powers were in existence and the authority passing the order of appeal was subordinate to the revisionary authority, and therefore, it was open for such authority as it deemed it appropriate to adjudicate the matter, strictly in accordance with law.
Commissioner has not examined the matter on merits and the analogy in the Income Tax Act whereby it has been held by the Hon’ble Bombay High Court that the process of taking a decision in the matter, sending the intimation, being a decision in itself in the nature of the order passed by the concerned authority gives sufficient ambit within the four corners of law under the Act of 1957 to invoke the jurisdiction of revision under Section 25 of the Act of 1957.
In view of the judgment rendered by the Hon’ble Bombay High Court in Anderson Marine [2003 (12) TMI 47 - BOMBAY HIGH COURT] and while taking into consideration the observations made by the learned Single Judge and not refuted by the respondent, this Court does not find any reason to interfere in the appeals, and thus, the special appeals are accordingly dismissed.
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2023 (7) TMI 1109 - ITAT BANGALORE
Wealth tax assessment - ownership of the impugned urban land - whether the assessee has transferred ownership of the impugned urban land to CIDL? - crux of the argument of the AR is that, as on the valuation date, the impugned urban land did not 'belong to' the assessee in view of the master development agreement - HELD THAT:- It is a fact that CIDL, the developer, did not develop the property except for constructing boundary walls along the property. (Even the construction of boundary is disputed, since the ‘cost of improvement’ for same was disallowed by the AO while computing LTCG when the same property was sold in AY 2008-09) This eventually led to the 'Settlement Agreement' between the parties whereby the master development agreement was terminated.
In view of the above, there can be no doubt in holding that the requirements of section 53A of the Transfer of Property Act, 1882 have not been fulfilled. It is pertinent to mention that mere inclusion of the expression in the development agreement that the possession transferred shall be deemed to be in part performance of an agreement to sell for the purposes of section 53A of the Transfer of Property Act 1882, does not hold any significance. It is the conduct of the parties that determine the satisfaction or otherwise of the requirements of section 53A of the Transfer of Property Act 1882. Therefore, we are of the view that there is no transfer of ownership of the impugned urban land under the master development agreement.
Effect of 'No objection certificate' issued under Chapter XX-C of the IT Act - Revenue right from the start of the controversy surrounding development agreements was always of the view that when the possession of land was handed over to the developer for development purposes, the transfer was effected. Legislature through the Memorandum to Finance Bill 2017, in the context of insertion of n/s 45(5A) to the Income-tax Act, 1961, clarified that the year in which the completion certificate has been issued by the competent authority shall be the year of transfer.
In view of the conclusion drawn in Seshasayee's case (2019 (12) TMI 702 - SUPREME COURT] which was post insertion of section 45(5A), that the provisions of section 2(47)(v) would not be applicable if the development agreement merely grants a license to the developer to develop and sell the superstructure. Therefore, the 'no objection certificate' does not in our view hold significance.
Chargeability of wealth tax - Land occupied by any building which has been constructed - In the present case, it is undisputed that only boundary walls have been constructed along the property. It is not brought on record as to whether there exists an approval of the appropriate authority for constructing any building on the land. Irrespective of such fact, the impugned urban land would not fall within the above clause for the following reason.
The Hon’ble Karnataka High Court in Commissioner of Wealth Tax vs. Giridhar G Yadalam [2007 (3) TMI 334 - KARNATAKA HIGH COURT] has interpreted the said expression to mean a land on which complete building stands. It was held that a building in the process of construction cannot be construed as a "building which has been constructed' as affirmed by Giridhar G Yadalam v Commissioner of Wealth Tax [2016 (1) TMI 826 - SUPREME COURT] - Therefore, in the absence of any building on the impugned urban land, this clause will not apply to the present case.
Land held by the assessee as stock-in-trade - The assessee has not demonstrated that the lands were held as stock-in-trade. It is also pertinent to note that the assessee cannot take conflicting stands before the court -Therefore, on totality of facts of the case, this clause will not apply to the present case. In view of the aforesaid reasoning we hold that the assessees are liable for wealth tax for the respective assessment years.
Decided against assessee.
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2023 (7) TMI 819 - ITAT MUMBAI
Wealth tax assessment - Computation of taxable wealth - addition on account of Net accretion to the assets on the basis of the additions made under the income tax proceedings - addition of on account of appreciation in the value of assets - HELD THAT:- As most of the details of the transactions were maintained by the assessee on a number of computers, which were seized, and upon the analysis of the seized data, it was found that complete share market transactions were not available therein. Therefore, it was held that complete books of account could not be generated from the seized data as well.
Thus, the original income tax assessment was also completed on the basis of the material available in the seized computer data, other records, and information gathered from various sources. It was held that the income of the assessee is represented by accounted and unaccounted investment in shares, jewellery, cash, unexplained money, and other unexplained assets, which in any case represents assets liable for levy of wealth tax.
AR apart from making general submissions did not bring any material on record to controvert the aforesaid findings of the learned CIT(A). In view of the peculiar facts of the present case, we find no merits in the submissions of the learned AR.
We find that the coordinate bench of the Tribunal in assessee’s own case in Smt. Jyoti H. Mehta v/s DCIT, [2019 (2) TMI 1198 - ITAT MUMBAI] granted substantial relief to the assessee. Accordingly, giving effect to the directions of the Tribunal, the total taxable income of Rs.299,77,95,160 was reduced to Rs.32,54,186, which has been adopted by the learned CIT(A) for computation of taxable wealth in the present case. Further, since from the very first Wealth Tax assessment order dated 28/03/1995, passed by the WTO under section 16(3) of the Act, the total income of the assessee is considered for computation of gross wealth, we find no merits in the ground raised by the Revenue in its appeal
Addition on account of appreciation in the value of shareholding - As evident that the coordinate bench in late Shri Harshad S Mehta v/s DCIT, [2019 (2) TMI 1198 - ITAT MUMBAI] observed that despite sufficient opportunity the Revenue failed to adduce the relevant material on the basis of which figures of purchase and sale of shares have been computed. Therefore, in view of the above, we deem it appropriate to restore this issue to the file of the WTO for de novo adjudication in light of the aforesaid decision of the coordinate bench of the Tribunal in assessee’s own case.
To the extent the shares in respect of which figures of purchase and sale have been found to be unsubstantiated by the Tribunal in the absence of relevant material being available on record, the WTO is directed to delete the addition on account of appreciation in the value of shares. To this extent, the impugned order is set aside. Accordingly, ground no.3, raised in assessee’s appeal is allowed for statistical purposes.
Addition on account of the value of stock exchange membership card - We find that the coordinate bench of the Tribunal in DCIT v/s Ashwin C. Shah [2001 (12) TMI 195 - ITAT BOMBAY] held that the right of membership of the BSE under the stock exchange card is merely a personal privilege granted to a member by the BSE and it cannot amount to “property” or “interest in property” to constitute an “asset” within the meaning of section 2(e) of the Act and thus no tax is payable in respect of such stock exchange card of the BSE. Therefore, addition made on account of the value of the stock exchange membership card is deleted. As a result, ground no.5 raised in assessee’s appeal is allowed.
Deduction on account of various liabilities incurred in relation to the assets belonging to the assessee - HELD THAT:- As further held that the figure of total income has been taken as the basis of computation of taxable wealth in the case of the assessee for the assessment year 1991-92 and a net wealth determined for the assessment year 1991-92 has, in turn, become the base figure for computing the net wealth for the assessment year 1992-93. Thus, it was held that the assessee cannot claim that the liabilities incurred in relation to assets belonging to the assessee while determining the net wealth have not been considered in the case of the assessee. We deem it appropriate to set aside the impugned order on this issue and restore the issue to the file of the WTO for de novo adjudication as per law after necessary verification. As a result, ground raised in assessee’s appeal is allowed for statistical purposes.
Levy of interest u/s 17B - This issue by following the decision of its predecessor in earlier rounds of litigation. We find that the interest u/s 17B of the Act is to be charged for the period commencing from the due date of filing the return till the date of filing the return or till the date of assessment, whichever is earlier. Therefore, we deem it appropriate to set aside the impugned order on this issue and direct the AO to levy interest u/s17B of the Act in accordance with the provisions of the Act. As a result, ground raised in assessee’s appeal is allowed for statistical purposes.
Levy of interest under section 31 - We find that in CIT v/s Chika Overseas Pvt. Ltd. [2011 (11) TMI 118 - BOMBAY HIGH COURT] held that where pursuant to remand, the AO passed a fresh assessment order, on failure of the assessee to pay the demand within the prescribed time the interest u/s 220 (2) is to be levied from the date of fresh demand. Since, provisions of section 220(2) are pari materia to section 31 of the Act, we find no infirmity in the aforesaid findings of the learned CIT(A). Accordingly, ground raised in Revenue's appeal is dismissed.
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2023 (1) TMI 1039 - ITAT AHMEDABAD
Wealth tax assessment - "assets" within the meaning of Section 2(ea) of the Wealth Tax Act - assessee submitted that the land at Sakarda which is an agricultural land, hence not an asset within the meaning of explanation (1)(b)(ii) to Section 2(ea) of the Wealth Tax Act - AO held that the land was situated within the distance of 2-3 k.m. from the municipal limits of Vadodara and the assessee failed to establish the said land was used for agricultural purpose and therefore added as an asset for Wealth Tax purpose - HELD THAT:- The findings of the Ld. CIT(A) in the penalty proceedings that the land at Sakarda is treated as business asset not liable to Wealth Tax. Similarly, the land at Kapurai wherein the assessee is the Power of Attorney holder and agreement to sell the above land to third party. Thus the assessee is not the owner of the land at Kapurai and the same is treated as business activity of the assessee, which is not an asset u/s. 2(ea) of the Wealth Tax Act. The Ld. D.R. appearing for the Revenue could not able to inform, whether this penalty order is also a subject matter of appeal before this Tribunal. Thus the findings made by the Ld. CIT(A) in penalty proceedings has attained finality.
Addition made on the land at Sakarda and land at Kapurai are not an “asset” within the meaning of Section 2(ea) of the Wealth Tax Act. Therefore the additions made by the A.O. are hereby deleted. Thus the grounds raised by the Assessee is hereby allowed.
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2023 (1) TMI 1038 - ITAT AHMEDABAD
Addition of wealth of the assessee on account of immovable property - valuation of property - value as per the provisions of wealth tax Act or the value of the property declared in the income tax return - As submitted that the value of the property in dispute has to be determined in the manner laid down in part B of schedule III of the Wealth Tax Act - whether the property for the purpose of wealth tax has to be valued as per the provisions of wealth tax Act or the value of the property declared in the income tax return can be adopted for the purpose of the wealth tax? - HELD THAT:- As no ambiguity to the fact that the assessee has furnished the necessary details before the AO during the assessment proceedings. However, the AO without pointing out any defect in the details furnished by the assessee has adopted the value of the bungalow in dispute declared in the balance sheet filed in the income tax return.
We note that the provisions of section 7 of the Wealth Tax Act is a substantive procedure as laid down in the case Commissioner of Wealth Tax Vs Shravan Kumar Swarup & Sons [1994 (9) TMI 2 - SUPREME COURT]
No ambiguity to the fact that the value of the property has to be determined in accordance to the method prescribed under the Wealth Tax Act and without making any reference to the valuation done for any other purpose under any other Act. In our humble understanding, the case laws referred by the learned Commissioner of Wealth Tax (Appeals) in his order in the case of K.E.M.I Kwaja Mohideen V. Income Tax Officer Ward I(1) Nayapattinam [2019 (7) TMI 1442 - MADRAS HIGH COURT] is not applicable in the given facts and circumstances for the reasons as discussed above.
As such the issue before The Hon’ble High Court of Madras was with regard to computation of capital gain under section 48 of the Income Tax whereas the issue before us is related the valuation of property for the purpose of wealth tax.
Allahabad High Court in the case of CIT vs. Padampat Singhania [2016 (11) TMI 708 - ALLAHABAD HIGH COURT] has held that the value asset/property is govern by section 7 of wealth tax Act read with Schedule –III of Wealth tax Act
We are of the opinion that the valuation of the bungalow in dispute has to be done as per the provisions specified under the Wealth Tax Act. Thus, the value declared under the income tax Act of the bungalow in dispute cannot be adopted for the purpose of the Wealth Tax Act. Accordingly, we set aside the finding of the learned Commissioner of Wealth Tax (Appeals) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is hereby allowed.
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2023 (1) TMI 1037 - ITAT HYDERABAD
Exigibility of 'Urban Land' to wealth tax - wealth Tax Officer considering the property situated at Radha Realtors, which was under construction, as asset within the meaning of section 2(ea) of the Wealth Tax Act. HELD THAT:- As assessee fairly conceded that the ground is decided against the assessee by the decision of the Hon'ble Supreme Court in the case of Giridhar G.Yadalam v. CWT . [2016 (1) TMI 826 - SUPREME COURT] Accordingly, the ground of appeal No.1 raised by the assessee is dismissed.
Taxability of the entire land for the purpose of wealth tax - HELD THAT:- We find the AO in the instant case valued the entire land of 1 Acre.03 guntas at Rs.1,40,02,927/- as the value of the asset for the year under consideration. It is the submission of assessee that in view of the decision in the case of Potla Nageswara Rao [2014 (8) TMI 636 - ANDHRA PRADESH HIGH COURT] for the purpose of arriving at the value of the land in question, the land that was transferred pursuant to the development agreement cannot be taken into consideration in the hands of the assessee as there is a transfer within the meaning of section 2(47) r.w.s. 45 of the Act and only the value of the land that has been retained by the assessee of 1067 sq. yards valued at Rs.29,73,920/- can be considered for the purpose of net wealth.
Since the lower authorities have not considered the applicability of the decision of the Hon'ble jurisdictional High Court cited(Supra), therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to adjudicate the issue afresh regarding the value of the land in question that has been retained by the assessee and the portion of the land that has been given to the Developers as per the Jt. Development Agreement. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee
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2022 (12) TMI 1240 - KARNATAKA HIGH COURT
Wealth tax assessment - Nature of land - “urban land” - land was converted for non-agricultural purpose - whether sanction of conversion of land for non–agricultural purposes would change the nature of land when the land is continued to be held as agricultural land by the appellant as on the valuation date? - urban land as classified as agricultural land in the record of the Government and used for agricultural purposes - HELD THAT:- Records of Right placed before us prima facie demonstrate that name of Shri. A.R. Narendranath is found in the Government Record. So far as use of the land for agricultural purposes is concerned, it is recorded in the Valuation Report dated November 28, 2014 prepared by Shri. V. Vellaichamy, District Valuation Officer of the Income Tax Department.
Thus, according to the Valuation Officer, there were several trees in the entire land in Sy. No.11/3. It also shows that the access to the said land is through Sy. No.14/1 owned by Shri. A.N. Narendranath. The Report does not clearly indicate whether standing trees were in Sy. No.11/3 or 14/1. Therefore, it requires reconsideration in the hands of the ITAT, which is the last fact finding authority
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2022 (10) TMI 556 - SUPREME COURT
Valuation of gifted shares - valuation of shares in lock-in period as per the provisions of Schedule III of the W.T. Act. - rules for determining the value of a gifted property under Gift Tax Act - HELD THAT:- The shares in the lock-in period have market value, which would be the value that they would fetch if sold in the open market. Rule 21 of Part H of Schedule III of the W.T. Act permits valuation of the property even when the right to transfer the property is forbidden, restricted or contingent. Rights and limitations attached to the property form the ingredients in its value. The purpose is to assume that the property which is being valued is being sold, and not to ignore the limitations for the purpose of valuation. This is clear from the wording of Rule 21 of Part H of Schedule III of the W.T. Act, which when read carefully expresses the legislative intent by using the words “hereby declared”.
The Rule declares that the price or other consideration for which any property may be acquired by, or transferred, to any person under the terms of a deed of trust or through any other restrictive covenant, in any instrument of transfer, is to be ignored as per the provisions of the Schedule III of the W.T. Act. The price of such property is the price of the property with the restrictions if sold in the open market on the valuation date.
Notwithstanding the restrictions, hypothetically the property would be assumed to be saleable, but the valuation as per the Schedule III of the W.T. Act would be made accounting and taking the limitation and restrictions, and such valuation would be treated as the market value. The rules do not postulate a charge in the nature and character of the property. Therefore, the property has to be valued as per the restrictions and not by ignoring them.
Thus, Rule 21 of Part H of Schedule III of the W.T. Act permits valuation and ascertainment of the market value as per the provisions of Schedule III of the W.T. Act, but does not state that the valuation will be done by disregarding the restrictions, or by enhancing the rights which have been transferred, or by revaluation of the asset when provisions of Schedule III are invoked for the purpose of valuation of an asset under the W.T. Act.
Explanation to Rule 2(9) of Part A, Schedule III of the W.T. Act. The certificate from the concerned stock exchange is only to state whether an equity share, preference share or debenture, as the case may be, was quoted with the regularity from time to time and whether the quotations of such shares or debentures are based on current transactions made in the ordinary course of business. The explanation does not prohibit the authority, tribunal or the court from examining whether a particular share, be it equity or preference share, is a “quoted share” or an “unquoted share” in terms of sub-rules (9) and (11) of Rule 2 of Part A of Schedule III of the W.T. Act. This right which is conferred on the authorities under the W.T. Act or the G.T. Act is not delegated to the stock exchange. A decision of the authority is amenable and can be examined when challenged in an appeal.
The present appeal by the Revenue is to be dismissed.
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2022 (9) TMI 1052 - ITAT HYDERABAD
Wealth tax assessment - addition being the value of the buildings (staff quarters) and an amount being the market value of the WDV at the beginning of the year of the vacant land - HELD THAT:- As submission of assessee that the assessee is covered by the exception stated in Explanation1 of the clause (i) of section 2(ea) of the Wealth Tax Act, 1957, there is no vacant land belonging to the assessee and the entire land is being used for industrial purposes. It is also his submission that if the additional evidences now filed are admitted, the same will substantiate that the assessee is not liable for any wealth tax.
Since the additional evidences filed before us were neither produced before the Assessing Officer or the CWT (A) and since these additional evidences go to the root of the matter for deciding the appeal, therefore, considering the totality of the facts of the case and in the interest of justice, we admit the additional evidences and restore the issue to the file of the Assessing Officer with a direction to consider these additional evidences and decide the issue as per fact and law - Grounds raised by the assessee allowed for statistical purposes.
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2022 (9) TMI 673 - ITAT CHENNAI
Wealth tax assessment - land sold by the assessee was an agricultural land or capital asset - HELD THAT:- Respectfully following the decision of the Tribunal in assessee’s own case in income tax matter [2019 (1) TMI 1989 - ITAT CHENNAI] as well as amendment to sub-clause (b) of Explanation 1 to clause (ea) of the Wealth Tax Act, 1957, we are inclined to uphold the view of the ld. CIT(A) that the land sold by the assessee was an agricultural land and not a capital asset. Therefore, the gain on sale thereof was not exigible to tax. Thus, the ground raised by the Revenue is dismissed for all the assessment years under consideration.
Assessing the property at Velachery as ‘Urban land’ liable to Wealth Tax - CIT(A) has observed that the land at Velachery cannot be construed as an “Urban land” under section 2(ea)(v) of the Wealth Tax Act for the reason that after obtaining proper planning permission, the building was constructed and the assessee has sold the built-up area from the assessment year 2010-11 to 2014-15. Therefore, the ld. CIT(A) directed the Assessing Officer to delete the addition made to wealth in the assessment year 2010-11. See GIRIDHAR G. YADALAM case [2016 (1) TMI 826 - SUPREME COURT] wherein it was held that when the property was given for development, unless the building is completed, it will not be construed as “building” and have liable for wealth tax as urban land.
Charging of interest under section 17B of the Wealth Tax Act - Admittedly, in the present case, the assessee has not filed the wealth tax return under section 14 or 15 or under section 17 and moreover, the assessment was made for the first time. Hence, we reverse the order of the ld. CIT(A) on this issue and allow the ground raised by the Revenue.
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2022 (9) TMI 618 - ITAT CHENNAI
Reopening of wealth tax assessment - Escaped assessment of wealth chargeable to tax - urban land as provided under Wealth tax Act - Whether property in question is exempt under the Wealth tax Act as the alleged plot in question was not exceeding 500 sq.mts in area and it is exempt u/s. 5(vi) of the Act ? - HELD THAT:- We find force in the contention of the Ld. AR as both the properties in question as stated in impugned order does not fall under the definition of asset(s) u/s. 2(ea) of the Act and falls under exempted asset under the definition of Wealth tax Act and accordingly we direct the Authority below to delete property(s) in question from the preview of net wealth for calculating the wealth tax, since we find that property(s) in question were exempted properties under the provisions of Wealth tax Act and does not attract any Wealth tax as determined by the Authority below. Appeal filed by the assessee is allowed.
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2022 (9) TMI 617 - ITAT CHENNAI
Reopening of wealth tax assessment - Escaped assessment of wealth chargeable to tax - assessee was liable for wealth tax but has not filed wealth tax returns - HELD THAT:- As the assessee has not furnished true particulars of wealth, we are of the considered opinion that the Assessing Officer has rightly reopened the assessment. Accordingly, the ground raised by the assessee is dismissed for both the assessment years.
Land in question as an agricultural land - Going by the stand of the assessee, if the land in question is under land acquisition and notification for acquisition has been passed by the Government then how the assessee has shown the asset in the books of account. Secondly, on perusal of the reply of the assessee, AO has found that the names of the previous owner of the property are different than that of the names given by the assessee in his reply. The relevant findings of AO are reproduced hereinabove. In order to counter the findings of AO the assessee has not brought on record any material evidence to take a different view than the view taken by the Assessing Officer. Thus, the ground raised by the assessee is dismissed for both the assessment years.
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2022 (9) TMI 616 - ITAT CHENNAI
Wealth tax assessment - Nature of land sold - Valuation of land - Joint ownership - HELD THAT:- As property was held in joint names, however, for all practical purposes, the assessee was the sole owner of the property. All the other joint owners were former employee having no source of income. In fact, the assessee himself claimed Long Term Capital Loss on entire property while filing its Income Tax Returns.
The same was also affirmed by the assessee in sworn statement which was never retracted. Even before constitutional authority, the assessee was declared to be the sole owner of the land. All these circumstantial evidences would show that the assessee was the sole owner of the land and other co-owners were namesake owners to avoid the provisions of Land Ceiling Act. Therefore, we find no infirmity in the impugned order on this issue.
Plea that the asset is not a land but building is also without any cogent evidence on record. Except for mere submission, there is nothing on record which would suggest that the assessee constructed building on this land. This plea was raised for the first time during appellate proceedings. However, the submissions were not supported by any material evidence. No plausible material has been produced before us also to substantiate this fact. Therefore, this plea of the assessee has also been rightly rejected by Ld. CIT(A).
Valuation of land - The extant rule required the assessee to value the land on valuation rate which the property would fetch if sold in the open market. CIT(A) has directed Ld. AO to considered year-on-year appreciation of 10%. We are of the considered opinion that considering the given factual matrix, this rate is on the lower side. Therefore, we direct Ld. AO to directed to adopt appreciation rate of 20% on year-on-year basis and recompute the value of the land. This ground stand partly allowed from AYs 2001-02 to 2004- 05 whereas this ground stand dismissed for AY 2005-06.
Debt Owed denied as the assessee could not produce any evidence to substantiate that the same were in respect of assets as included in taxable wealth - The onus to prove the nexus of liabilities with the taxable wealth could not be discharged by the assessee. No new material has been placed before us to establish this nexus. Therefore, no relief could be granted to the assessee on this score. The grounds stand dismissed for all the years.
Computation of interest is concerned, it would be suffice to direct Ld. AO to compute correct interest in accordance with law. This ground stand allowed for statistical purposes for all the years.
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2022 (9) TMI 615 - ITAT HYDERABAD
Net wealth estimation - nature of the land sold - Whether land is required to be treated as agricultural land irrespective of the fact, it is situated in urban area? - HELD THAT:- Undoubtedly, the urban land has been defined under the Act under clause (b) of Explanation 1 to clause (ea) of Section 2 of the Act. From the perusal of the above definition, it is clear that the land though situated in the urban area, but it would not be classified as an urban land, if the land continues to be reflected in the government record as agricultural land and land being used for agricultural purposes.
CWT(A) was required to seek a report from the Revenue Authority and find out whether during the relevant period the land purchased by the assessee continues to be agricultural land in revenue records or not and further it was used for agricultural purposes or not. In our view, Assessing Officer / ld.CWT(A) should have issued summons under the relevant provision of the Act and sought the documents / report about the nature of land and its uses during the relevant assessment years 2011-12 to 2013-14.
We deem it appropriate to remand back all the three appeals with a common direction to the file of Assessing Officer for verification from the Revenue records as to 1) whether the land is situated in urban area; (2) if the land is situated in urban area, whether the same was mentioned in government records as agricultural land or not (3) whether the land is continued to be used for agriculture purpose during the relevant period and 4) Whether the predecessor in interest was carrying out the agricultural activities during the period.
We deem it appropriate to remand back the matter to the file of Assessing Officer for denovo passing the assessment order afresh.
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2022 (9) TMI 614 - ITAT CHENNAI
Wealth tax assessment - Addition in hand in excess as part of the balance sheet and business asset not taxable under the provisions of Section 2(ea) of the Wealth Tax Act - CIT(A) deleted the addition by holding that the Assessee, an individual is engaged in the business and once he is maintaining the books of accounts and cash in hand is in the books of accounts, the same being business asset cannot be added under the provisions of Section 2(ea) - HELD THAT:- As the issue is squarely covered and the Assessee’s cash in hand pertains to business and is kept as cash in hand as in the balance sheet of the business of the Assessee, the same cannot be treated as an asset u/s.2(ea) of the Act. Hence, this issue in the Revenue’s appeal is dismissed.
Addition made on account of the urban land at T.Nagar, Chennai - Once the building is under construction, whether to be treated as an asset for the purpose of Wealth Tax? - This issue has been answered by the Co-ordinate Bench of the Tribunal, Cochin Bench in the case of Federal Bank Limited [2005 (11) TMI 190 - ITAT COCHIN] we noted that this issue is covered in favour of the Assessee and hence respectfully following the Co-ordinate Bench of this Tribunal, we dismiss this issue of the Revenue’s appeal.
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2022 (8) TMI 158 - ITAT AHMEDABAD
Reopening of Wealth tax assessment - Treating lands at Vastrapur and Rancharda as urban lands - assessee had not included the urban land cost and cash in hand after exemption for wealth chargeable to Wealth Tax - HELD THAT:- It is pertinent to note that the said land and the details given by the assessee before us were only related to Talati Certificate which is undated. The other documents which were before us and before the CIT(A), as contended by the assessee, are not showing that the said land were not coming under the urban land definition. AR further contended that the reasons were not supplied to the assessee by reopening the case but since the very basis of reopening was related to the urban land, the assessee was very much aware about the reasons upon which the reopening was made by the Revenue Authorities. Thus, the reopening is valid which is also reiterated by the CIT(A) in paragraph of the order of the CIT(A). Hence ground are dismissed.
Lands at Vastrapur and Rancharda were coming under the definition of urban land under section 2(ea)(v) of the Wealth Tax Act as the documents which were produced before the Revenue Authorities and before us clearly does not state that this are agricultural land. The assessee contended that these are agricultural land as per the records of the Government but only document which was on record is related to Talati Certificate which is undated and is not specifying the period of agricultural activity or not specifying the agricultural produce on the said land. Whether any land comes under the urban land or agricultural land, the certificate from Collector should have been placed by the assessee but since the assessee failed to do so it is clear that the said land is urban land and, therefore, the AO rightly made wealth tax addition towards both of these lands. Assessee appeal dismissed.
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2022 (7) TMI 304 - KARNATAKA HIGH COURT
Wealth tax Assessment - assets" under section 2(ea) of the Wealth Tax Act - interpretation of section 2(47)(v) of the Income-tax Act - whether Tribunal was correct in law in holding perversely that the appellant continued to be the owner of urban land under section 2(ea) of the Wealth Tax Act, 1957 despite the fact that the appellate (after transferring the land to the developer through JDA dated 05-12-2000) retained only the right to receive 15.3% of the total built up area, which does not fall within the exhaustive definition of "assets" under section 2(ea) of the Wealth Tax Act, 1957? - HELD THAT:- A combined reading of Clause 10.1(g), Clause 13.1, 13.2 and Clause A(viii) of the Annexure-A together with the 'No Objection' under Chapter XX-C of the IT Act and the letter written by Shri. Dhingra prima facie demonstrates that the Developers did have power to alienate their portion of the property; and they had entered into the property. It is a different matter if the project did not progress further. A mere failure of the project does not undo the acts of the parties. Therefore, in our view, the impugned order passed by the ITAT is not sustainable and in the facts and circumstances of this case, it is just and appropriate for the ITAT to have a re- look into the matter in the light of the contents of MDA, NOC issued under Chapter XX-C and the letter written by Shri. Dhingra.
Appeals are allowed.
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2022 (5) TMI 138 - ITAT CHENNAI
Nature of land sold - assessee has filed details that the land sold is agricultural land and claimed exemption u/s.2(14) of the Act and the assessee filled following details but the AO rejected the assessee’s claim that the assessee has sold agricultural land - HELD THAT:- We noted that the assessee sold the land at 127, A Block, Panruti Village, Sriperumbudur Taluk, Kanchipuram District and the adjacent land sold by assessee’s family member Smt. Majeeda Shahida Begum [2018 (7) TMI 2256 - ITAT CHENNAI] having same address ‘No.127, Panruti Village, Sriperumpudhur Taluk, as the Tribunal in that matter has remanded the matter back to the file of the AO, taking a consistent view, we also restore this issue back to the file of the AO with identical directions. The issue on merits is kept open. Hence, this appeal of assessee is allowed for statistical purposes.
Whether this is agricultural land or land liable to wealth tax in term of Section 2(ea) of the Wealth Tax Act, 1957? - Since the matter is restored back to the file of AO in the income tax proceedings, the matter relating to wealth tax in these two appeals is also restored back to the file of the AO. In case, the land is agricultural land in term of section 2(ea) of the WT Act, wealth tax will not be levied and in case it is an asset in term of section 2(ea) of the WT Act, the AO will levy wealth tax accordingly. Hence, both the appeals of assessee are allowed for statistical purpose.
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2022 (5) TMI 137 - ITAT CHENNAI
Wealth tax assessment - assessment of cash in hand in the hands of individual assessee - whether liable to wealth tax or not? - assessee claimed that he runs a big retain chain of business in the State wherein the daily cash sales clocks in an average of Rs.1.5 crores and availed overdraft facility from Indian Bank, T.Nagar Branch against the security of current asset, mainly of stock in trade with the condition that the realization of sale proceeds is to be deposited with them - HELD THAT:- We noted that the assessee may be having big retail chain of business but assessee is an individual. Admittedly, the assessee has cash in hand of Rs.1,41,65,793/-. As per the Wealth Tax Act, Section 2(ea) i.e., definition of assets in relation to assessment year commencing on the 1st day of April 1993 or any subsequent assessment year means
(vi) cash in hand, in excess of fifty thousand rupees, of individuals and Hindu undivided families and in the case of other persons any amount not recorded in the books of account
We noted that assessee is an individual and this cash in hand is kept in the capacity of individual and not kept as cash in books of accounts. As per the definition of section 2(ea)(vi) of the Act, the excess cash in excess of rupees fifty thousand will be treated as asset and will be included in the net wealth of the assessee. In term of the above, we find no infirmity in the orders of lower authorities and accordingly this issue of assessee’s appeal is dismissed.
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2022 (4) TMI 1513 - JHARKHAND HIGH COURT
Refund the amount realized from the bank account of the petitioner, which was realized during the pendency of Appeal - HELD THAT:- Upon remand by the learned ITAT the assessment has been completed and order has been passed read with corrigendum wherein the petitioner has been assessed for amount of Rs.2,38,32,860/- and a demand notice has been issued on 31st March 2022 raising a total demand of Rs.71,14,028/- after making necessary adjustment including the adjustment of Rs.36.59 Lakhs which the petitioner was claiming as refund.
These statements have been made in the supplementary counter affidavit filed by the respondents. In view of these developments, learned counsel for the petitioner seeks permission to withdraw the writ application in order to seek appropriate remedy in accordance with law.Writ petition is, accordingly, dismissed as withdrawn with the aforesaid liberty.
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