1987 (1) TMI 132 - AT - Wealth-tax

Land in Andheri deemed agricultural for Wealth Tax Act, securing exemption under specific sections.

KANAIYALAL MANEKLAL CHINAI. Versus TWELFTH WEALTH TAX OFFICER.

KANAIYALAL MANEKLAL CHINAI. Versus TWELFTH WEALTH TAX OFFICER. - TTJ 028, 392, Issues involved:1. Whether the land in question qualifies as agricultural land for the assessment year 1979-80 under the Wealth Tax Act.2. Whether the assessee is entitled to exemption under section 5(1)(iva) read with section 5(1A) of the Wealth Tax Act based on the classification of the land as agricultural.Detailed Analysis:Issue 1: The primary issue in this case is whether the land held by the assessee, known as Bombivili Land in Andheri, qualifies as agricultural land for the assessment year 1979-80 under the Wealth Tax Act. The assessee claimed that the land was used for cultivation in the past and was assessed to land revenue. The Revenue records indicated agricultural operations on the land for several years, and the land had not been put to non-agricultural use. The Tribunal observed that the circumstances prima facie indicated that the land in question was agricultural land, based on the evidence presented by the assessee.Issue 2: The second issue pertains to whether the assessee is entitled to exemption under section 5(1)(iva) read with section 5(1A) of the Wealth Tax Act if the land is classified as agricultural. The Tribunal noted that for the assessment year 1979-80, agricultural land was not entirely exempt from inclusion in net wealth. However, under the relevant provisions, an exemption of up to Rs. 1,50,000 was available for the value of agricultural land along with other assets. The Tribunal considered the evidence presented by the assessee, including the historical agricultural use of the land, and concluded that the land should be treated as agricultural land for the purposes of granting relief under the Wealth Tax Act.In the judgment, the Tribunal highlighted the absence of a definition of agricultural land in the Wealth Tax Act and emphasized that the location within a corporation area does not preclude land from being classified as agricultural. The Tribunal also addressed the Department's arguments to rebut the presumption of agricultural land status, noting that the lack of agricultural operations in the relevant year did not negate the historical agricultural character of the land. The Tribunal relied on a Bombay High Court decision supporting the assessee's claim, which emphasized that land previously used for agriculture could still be considered agricultural land even if fallow. Additionally, the Tribunal distinguished a Supreme Court decision cited by the Department, indicating that it did not impact the current case.Ultimately, the Tribunal set aside the lower authority's decision and directed the Wealth Tax Officer to treat the land as agricultural land under section 5(iva) of the Wealth Tax Act, granting relief as permissible under section 5(1A). The appeal by the assessee was allowed, affirming the classification of the land as agricultural and the entitlement to exemption under the Wealth Tax Act for the assessment year 1979-80.