2015 (9) TMI 1249 - AT - Wealth-tax

Land classified as agricultural exempt from Wealth Tax per Tribunal. Ongoing activities support decision.

The Tribunal upheld the CWT(A)'s decision that the land qualified as agricultural and was exempt from being considered an 'asset' for Wealth Tax purposes. ... Valuation of the land for Wealth Tax purposes - revenue contended that, there was no restriction concerning construction or development over the land of the assessee, by any Act or Law for the time being in force and the assesssee could have made such construction with permisssion from the appropriate authority. - CWT(A) deleted the addition as land was agricultural land and agricultural operations were being carried out thereat and that so, the land was covered by the exemption in the definition of 'asset' in terms of Section 2(ea) of the Wealth Tax Act. Held that:- The learned CWT(A), though, has decided the issue on the basis of certificate dated 27.11.2009 issued by the Town and Country Planning, Shimla, as per which certificate, no construction activity could be started on the land under construction without obtaining prior approval of the Competent Authority. Pertinently, though this certificate, dated 27.11.2009 stands filed before the WTO, this certificate has not been taken into consideration by the WTO while passing the assessment order dated 9.12.2009 for Assessment Year 2002-03. For the other years also, the position remains likewise. The only unescapable conclusion is that the land of the assessee has rightly been held by learned CWT(A) to be exempt from the definition of 'asset' within the meaning of section 2(ea) of the Wealth Tax Act, as amended by the Finance Act 2013 with retrospective effect from 1.3.1993. - Decided against the revenue. Issues Involved:Appeal and cross objections for Assessment Years 2002-03 to 2005-06 regarding the valuation of agricultural land for Wealth Tax purposes.Analysis:1. The Tribunal considered department's appeals and assessee's cross objections for Assessment Years 2002-03 to 2005-06, addressing common issues in a single order.2. The counsel for the assessee withdrew cross objections for the mentioned years, leading to their dismissal.3. The WTO held that the land in question was covered under the definition of 'asset' for Wealth Tax purposes due to lack of freezing of land use and absence of restrictions on construction or development.4. The CWT(A) disagreed, stating that the land qualified as agricultural land and was exempt from the definition of 'asset' under the Wealth Tax Act.5. The department contested the CWT(A)'s decision, arguing that no restrictions on construction or development existed, and the addition made on undeclared taxable wealth should not have been deleted.6. The counsel for the assessee supported the CWT(A)'s decision, emphasizing the agricultural nature of the land and ongoing agricultural operations.7. After reviewing the evidence, including a certificate from the Town and Country Planner, the Tribunal upheld the CWT(A)'s decision that the land was exempt from being considered an 'asset' under the Wealth Tax Act.8. The Tribunal highlighted the evidence of agricultural activities on the land, including cultivation and possession by the assessee, supporting the conclusion that the land was agricultural in nature.9. The Tribunal also noted discrepancies in ownership claims but emphasized the evidence of agricultural use as decisive in determining the land's classification.10. The absence of disputed evidence regarding agricultural activities further supported the Tribunal's affirmation of the CWT(A)'s decision.11. The Tribunal concluded that the land was rightfully considered exempt from the definition of 'asset' under the Wealth Tax Act, as determined by the CWT(A) based on the evidence presented.12. Consequently, the Tribunal upheld the CWT(A)'s orders for all years under consideration, rejecting the department's grievances as lacking merit.13. Both the appeals filed by the department and cross objections filed by the assessee were dismissed, affirming the CWT(A)'s decision regarding the classification of the land.14. The order was pronounced on 21st August 2015, closing the proceedings related to the valuation of the agricultural land for Wealth Tax purposes.