Urban land test under wealth-tax: BIAPPA status and road-distance measurement kept the lands outside tax net.

BIAPPA was held not to be an authority equivalent to a municipality or cantonment board for determining whether the lands were urban land, and the Tribunal followed its earlier decisions in the assessees' own and related co-owner matters. It also held that the substituted wording in section 2(14)(iii)(b) of the Income-tax Act, 1961, introduced from 01.04.2014, could not be applied retrospectively to assessment year 2007-08. Applying the law relevant to that year, the distance from BBMP limits had to be measured by road rather than by aerial distance. On that basis, the lands were treated as agricultural land and not as urban land exigible to wealth-tax.

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Issues: Whether the lands in question were "urban land" exigible to wealth-tax, including whether BIAPPA constituted a local authority and whether distance from BBMP limits had to be measured by straight line or by road.

Analysis: The Tribunal followed its earlier decision in the assessees' own case and the connected co-owner's case to hold that BIAPPA does not answer the description of an authority akin to a municipality or cantonment board for this purpose. It further held that, for assessment year 2007-08, the substituted provision in section 2(14)(iii)(b) of the Income-tax Act, 1961, introduced from 01.04.2014, could not be applied retrospectively. Relying on the law applicable for the relevant year and the cited judicial authority, the Tribunal held that the distance had to be reckoned by road and not by aerial measurement.

Conclusion: The lands were agricultural lands and not urban land exigible to wealth-tax, so the Revenue's appeals failed.

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