Factory land exemption upheld for land under construction, while the valuation estimate was sustained on the facts.

Land held and used for construction of a factory building was treated as part of the factory premises and entitled to wealth-tax exemption under the applicable factory-property exclusion; the assessee succeeded on that issue. The valuation adopted at Rs. 5,000 per cent was also found reasonable on the facts, as no material was produced to displace the lower authorities' estimate, so the valuation was upheld.

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Issues: (i) Whether the 3.60 acres of land used for constructing a factory building was exempt from wealth-tax under section 40(3)(vi) of the Finance Act, 1983. (ii) Whether the valuation adopted at Rs. 5,000 per cent for the land was justified.

Issue (i): Whether the 3.60 acres of land used for constructing a factory building was exempt from wealth-tax under section 40(3)(vi) of the Finance Act, 1983.

Analysis: The land was treated as part of the factory premises and the facts were found to be identical to an earlier Tribunal decision holding that land on which a factory building stands, or is under construction for factory use, is entitled to the statutory exemption. The existence of acquisition proceedings and the later obtaining of pollution control clearance supported the conclusion that the land was held for factory purposes and fell within the exemption provision.

Conclusion: The exemption claim was allowed in favour of the assessee for the 3.60 acres of land.

Issue (ii): Whether the valuation adopted at Rs. 5,000 per cent for the land was justified.

Analysis: No material was shown to displace the valuation fixed by the lower authorities, and the rate adopted was found to be reasonable on the facts.

Conclusion: The valuation at Rs. 5,000 per cent was upheld against the assessee.

Final Conclusion: The assessee succeeded only on the exemption issue, while the valuation determination was sustained, resulting in a partial allowance of the appeals.

Ratio Decidendi: Land held and used for construction of a factory building may qualify for exemption under the applicable wealth-tax exclusion for factory-related property, even if the building is not yet fully completed.

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