Agricultural land exclusion under wealth-tax: land in revenue records and not open to construction was not taxable as urban land.

Land recorded as agricultural in sale deeds and revenue records, with no evidence of non-agricultural use or lawful permission for construction, fell within the exclusion from "urban land" under Explanation 1(b) to section 2(ea) of the Wealth-tax Act as amended by the Finance Act, 2013 with retrospective effect. The ITAT held that such land was not includible as an asset for wealth-tax purposes, so the wealth-tax addition on alleged urban land was unsustainable and was deleted.

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Issues: Whether agricultural land recorded as such in the government records and sold as agricultural land could be treated as "urban land" and included in taxable wealth under section 2(ea) of the Wealth-tax Act.

Analysis: The land purchased by the assessees was described in the sale deeds and revenue records as agricultural land, and there was no evidence that it had been used for any non-agricultural purpose or that construction on it was permissible. The amended exclusion in Explanation 1(b) to section 2(ea) of the Wealth-tax Act, introduced by the Finance Act, 2013 with retrospective effect, excludes land classified as agricultural land in government records and used for agricultural purposes, as well as land on which construction is not permissible under law. On these facts, the land fell within the statutory exclusion from "urban land".

Conclusion: The land was not includible as an asset for wealth-tax purposes, and the addition was unsustainable.

Final Conclusion: The additions made towards alleged urban land were deleted, and both appeals succeeded.

Ratio Decidendi: Land classified as agricultural in the government records, and not shown to have been put to non-agricultural use or to permit construction under the applicable law, is excluded from "urban land" for wealth-tax purposes.

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