Wealth-tax asset definition excludes business cash and land under active construction from taxable assets under section 2(ea).

Cash shown in a business balance sheet of an individual engaged in trade was treated as part of the business asset, not personal cash, and therefore outside the taxable cash in hand covered by section 2(ea) of the Wealth Tax Act. Land on which construction of a building was in progress was treated as an active construction site, not vacant urban land, and therefore not taxable as an asset under section 2(ea). On both issues, the wealth-tax additions were not sustained.

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Issues: (i) Whether cash in hand reflected in the business balance sheet of an individual engaged in business could be treated as an asset chargeable to wealth tax under section 2(ea) of the Wealth Tax Act, 1957. (ii) Whether land on which construction of a building was in progress could be treated as an urban land taxable as an asset under section 2(ea) of the Wealth Tax Act, 1957.

Issue (i): Whether cash in hand reflected in the business balance sheet of an individual engaged in business could be treated as an asset chargeable to wealth tax under section 2(ea) of the Wealth Tax Act, 1957.

Analysis: Cash shown in the books of account was found to be part of the business activity and not the assessee's personal cash. The definition of asset under section 2(ea) was applied to distinguish personal cash from cash forming part of business assets. Following the reasoning adopted in earlier coordinate bench decisions, business cash standing in the balance sheet was held not to fall within the taxable cash in hand contemplated by the provision.

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

Issue (ii): Whether land on which construction of a building was in progress could be treated as an urban land taxable as an asset under section 2(ea) of the Wealth Tax Act, 1957.

Analysis: The property was an admitted construction site and not a vacant urban land. Applying the principle that land under active construction loses the character of vacant land for wealth-tax purposes, the asset was held outside the taxable category under section 2(ea).

Conclusion: The issue was decided in favour of the assessee and against the Revenue.

Final Conclusion: The Revenue's challenge failed on both substantive issues, and the assessment additions were not sustained.

Ratio Decidendi: Cash forming part of a business asset and land under active construction do not assume the character of taxable assets under the relevant wealth-tax definition merely because they appear in the balance sheet or are physically undeveloped on the valuation date.

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