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of <h1>Advances for land purchase not taxable! Tribunal rules in favor of appellant. Wealth Tax Act.</h1> The Tribunal ruled in favor of the appellant, holding that advances paid for the purchase of plots should not be considered as part of the net wealth for ... Assessment of advances paid for purchase of plots - whether the advances made for purchase of plots constitute an asset or not within the meaning of section 2(ea) of the Act for the purpose of wealth tax act? - Held that:- From the plain reading of section 2(ea) of the W.T. Act, the taxable assets are the building or land appurtenant thereto, motor cars, jewellery, bullion and furniture or any other article made of gold, silver, platinum or any other precious metal, yatch, boats and air crafts, urban land and cash in hand etc.. but the advances made for purchase of plots are not included in the meaning of assets. Unless the Act provide for the assessment of advances for purchase of plots within the meaning of assets, the same cannot be treated as net wealth for the purpose of wealth tax act. In the absence of specific provision for making the advance for purchase of asset to wealth tax, we are unable to uphold the action of the lower authorities. - Decided in favour of assessee. Issues: Assessment of advances paid for purchase of plots for wealth tax purposes.Analysis:1. The appellant contested the assessment of advances paid for the purchase of plots, arguing that the payments made were advances and not taxable assets under the Wealth Tax Act. The appellant highlighted that the properties were not acquired during the relevant assessment year and thus should not be included in the net wealth calculation.2. The appellant's representative emphasized that the definition of assets under section 2(ea) of the Wealth Tax Act does not encompass advances for computing net wealth. The appellant argued that the assessing officer erred in treating the advances for plot purchases as assets, which led to the incorrect addition to the net wealth.3. On the contrary, the respondent contended that the full payments made by the appellant for the plots in Hyderabad and Noida should be considered part of the net wealth. The respondent argued that once the full payment was made, the appellant gained rights over the plots, making them liable for inclusion in the net wealth calculation.4. After considering the arguments from both parties and reviewing the relevant provisions of the Wealth Tax Act, the Tribunal found that the advances made for the purchase of plots did not fall within the definition of taxable assets under section 2(ea) of the Act. The Tribunal noted that unless the Act specifically includes advances for plot purchases as taxable assets, they cannot be treated as net wealth for wealth tax purposes.5. Based on the interpretation of the law and the absence of provisions to tax advances for plot purchases, the Tribunal set aside the orders of the lower authorities and allowed the appeal of the assessee. The Tribunal concluded that the advances made by the appellant for the purchase of plots should not be considered as part of the net wealth for wealth tax assessment.6. Consequently, the Tribunal allowed the appeal filed by the assessee, ruling in favor of the appellant and overturning the decision of the lower authorities regarding the inclusion of advances paid for the purchase of plots in the net wealth calculation.
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