2022 (5) TMI 138 - AT - Wealth-tax

Tribunal remands case for reassessment, stresses importance of agricultural status

The Tribunal remanded the case back to the Assessing Officer for further consideration, allowing the appeal for statistical purposes. The appellant's ... 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. Issues:1. Determination of whether the land in question is agricultural land for income tax purposes.2. Adjudication of the exemption claim under section 2(14) of the Income Tax Act.3. Assessment of long-term capital gains and deduction under section 54F of the Income Tax Act.4. Consideration of evidence and claims made by the assessee regarding the nature of the land sold.5. Review of the appellate orders and remand of the matter back to the Assessing Officer.6. Assessment of whether the land is liable to wealth tax under section 2(ea) of the Wealth Tax Act.Analysis:1. The appeal in ITA No.2627/Chny/2017 raised the issue of whether the land in question was agricultural land. The appellant contended that the CIT(A) did not address this crucial issue. The CIT(A) rejected the fresh claim made by the assessee regarding the exemption under section 2(14) of the Income Tax Act. The appellant argued that the land should be considered an exempted asset within the scope of section 2(14) and claimed deduction under section 54F, affecting the computation of long-term capital gains. The CIT(A) noted that the assessee did not initially claim the land as agricultural in the return of income, and fresh claims without revising the return were not maintainable. The Tribunal found inconsistencies in the assessment and remanded the matter back to the Assessing Officer for further consideration, allowing the appeal for statistical purposes.2. The appellant provided various documents to support the claim that the land sold was agricultural. Despite the evidence presented, the AO rejected the claim. The Tribunal considered a similar case involving the appellant's family member, where the nature of the land was disputed. Following the consistent approach, the Tribunal remanded the matter back to the AO for reevaluation, keeping the issue on merits open. The Tribunal emphasized the importance of determining whether the land sold was agricultural, as it impacts the tax liability on capital gains.3. The Wealth Tax Appeals in WTA Nos.61/CHNY/2017 & 75/CHNY/2018 revolved around the classification of the land for wealth tax purposes. Since the income tax proceedings were remanded back to the AO for reconsideration, the Tribunal also restored the wealth tax matters to the AO's jurisdiction. Depending on whether the land is deemed agricultural or not under section 2(ea) of the Wealth Tax Act, the wealth tax liability will be determined accordingly. Both appeals were allowed for statistical purposes, aligning with the decisions made in the income tax appeal.4. The Tribunal's comprehensive analysis focused on the proper adjudication of the nature of the land in question, the validity of the exemption claim under the Income Tax Act, and the implications for capital gains taxation and wealth tax liability. By remanding the matters back to the Assessing Officer, the Tribunal ensured a thorough review of the evidence and claims presented by the assessee, maintaining consistency with similar cases and upholding the principles of tax law.