1983 (4) TMI 91 - AT - Income Tax

Agricultural land not 'business premises' for wealth tax exemption. Appeals dismissed.

The Tribunal held that agricultural land, even when used for systematic and organized agricultural operations, does not qualify as 'business premises' for ... Additional Wealth Tax, Agricultural Income, Business Premises Issues:- Whether certain properties owned by the assessee constitute 'business premises' and are excluded from the levy of additional wealth-tax under the Wealth-tax Act, 1957.Detailed Analysis:1. The judgment pertains to appeals and cross-objections against the order of the Commissioner (Appeals) sustaining the levy of additional wealth-tax on certain immovable properties treated as urban assets. The properties in question were agricultural land within Corporation limits. The main contention was whether these properties qualified as 'business premises' and thus exempt from additional wealth-tax.2. The assessee argued that the properties were agricultural land used for the business of agriculture, meeting the definition of 'business premises' under the Wealth-tax Act. The representative emphasized that agriculture involves systematic entrepreneurial activity for profit, citing relevant case law and a previous Tribunal order supporting this interpretation.3. The departmental representative countered, stating that mere agricultural operations do not constitute business activity unless there is a systematic or organized course of activity with a set purpose. The representative argued that the assessee's activities did not meet this standard and distinguished the case law relied upon by the assessee.4. The Tribunal analyzed the definition of 'business premises' under the Act, emphasizing that for urban land to be classified as business premises, the activities conducted on the land must be capable of producing profits taxable as business profits. The Tribunal highlighted that agricultural income, as defined in the Income-tax Act, is exempt from assessment, indicating that agriculture does not generate taxable business profits.5. The Tribunal further elaborated on the expansive nature of the term 'business,' noting that it involves a systematic, organized course of activity aimed at making a profit. It distinguished agricultural operations from business activities, highlighting that income derived from agriculture is not considered business income but agricultural income.6. Referring to a decision by the Punjab and Haryana High Court, the Tribunal concluded that agricultural land, even if used for systematic and organized agricultural operations, does not qualify as business premises for the purpose of exemption from additional wealth-tax. Therefore, the assessee was not entitled to the claimed exemption, and the appeals were dismissed.7. The judgment also briefly mentions a minor issue not reproduced in the summary, leading to the dismissal of all appeals and cross-objections.