TaxTMI 
TaxTMI 
2016 (4) TMI 654
X X X X Extracts X X X X
X X X X Extracts X X X X
....on by ignoring the exemptions provided for as per the provisions of Wealth Tax Act, 1957 and rules made there under. The appellant named above craves to add to alter, to amend and to modify the grounds as and when required. 4. The assessee in addition to original grounds of appeal has also filed additional grounds of appeal for all the respective years under appeal, which read as under:- 1. In treating the land which was acquired by the Government under Land Acquisition Act, 1894 for the public purpose, as an asset belonging to the assessee and making it liable to wealth tax under Wealth Tax Act, 1957. The action of the AO being contrary to the facts and being bad in law it is prayed that the said land be treated as not taxable under the Wealth Tax Act, 1957. 2. In including in the net wealth of the company the vacant land, which was acquired by the Government under Land Acquisition Act, 1894 for residential colony of the company. The action of the AO being contrary to the facts and being bad in law it is prayed that the said land be treated as not taxable under the Wealth Tax Act , 1957. 3. Without prejudiced to the contention that the land, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e tracts of unbuilt colony land had become independent in themselves, since they do not cause any detriment to the enjoyment of the building as such. Moreover, the Asset Sale Committee of HAL formed under the Rehabilitation Scheme of BIFR had felt that such land could be ceded from the remaining part of land in occupation by HAL and can be sold in the market. The Assessing Officer thus, held that the above finding that the unbuilt colony land had remained unused for long makes it amenable to be included in the taxable wealth of the assessee company. The Assessing Officer vide para 5.4 observed that during the course of income-tax assessment proceedings, the assessee had admitted on its own that the market value of 20 acres of land lying at its disposal was about 100 to 150 crores for financial year 2010-11. Thus, taking the average value of land at Rs. 138 crores for 20 acres, the value of land per acre was worked out at Rs. 6.25 crores for financial year 2010-11. Taking 10% step down value per year for inflationary factors, the market value of the land unused of 60 acres was extrapolated backwards for last few years and it was worked out as under:- Financial Year Assessment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de in this regard. The CWT(A) noted the factual aspects of the case and also noted that on a later date, there was an intimation to the BIFR Chairman, Government had decided to consider a second revival package without taking recourse to sell the land, which was on a later date reversed and hence, there was no merit in the admission of the aforesaid additional evidence. The CWT(A) thus, was of the view that the land in question was acquired for the purpose of expansion of colony of the assessee and though the land remained unused urban land. As per the definition of urban land in Explanation (b) to section 2(ea) of the Act, where any unused land held for industrial purposes for a period of two years of its acquisition was an asset chargeable to wealth tax. The contention of the assessee that the said land in question was exempt from Wealth Tax, was not accepted by CWT(A) and the order of Assessing Officer in treating the unused urban land chargeable to Wealth Tax was upheld. 9. The assessee is in appeal against the order of CWT(A). 10. The learned Authorized Representative for the assessee pointed out that in order to adjudicate the present issue raised before the Tribunal, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ands vests absolutely in the Government. Where once the land is vested in the Government, the land can be utilized for any other public purpose on account of change or surplus thereof, was held by the Hon'ble Bombay High Court. It was further pointed out by learned Authorized Representative for the assessee that Special Leave Petition against the order of Hon'ble High Court has been dismissed by the Hon'ble Supreme Court. The learned Authorized Representative for the assessee fairly submitted that all the submissions before the lower authorities were on the presumption that the said land belonged to the company. However, in view of the awareness of legal aspects, a new legal plea was being raised before the Tribunal and hence, the additional grounds of appeal were raised. He further submitted that the assessee had no right over the said land, except to use the land for residential colony i.e. a limited right and the entire land belonged to the Government of India. With regard to the meaning of ownership, the learned Authorized Representative for the assessee referred to the decision in Osman Ali Khan (late) v. CWT [1986] 162 ITR 888 (SC) and pointed out that an asset is to belong t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny of its employees. When the assessee went in liquidation, permission was given by the Government of India to sell the land in order to recoup the losses and this establishes that the land belongs to the assessee and hence, includable in the hands of assessee for computing its wealth for captioned assessment years. 12. We have heard the rival contentions and perused the record. The assessee before us is a Government company, which is owned by the Government of India. There is no dispute about the said fact that the assessee is a Government company and is owned by the Government. The Government initiated acquisition proceedings of land from Village Pimpri, Wagheri, Taluka Haveli, district Pune for expansion of residential colony of assessee company. In view thereof, certain land was acquired by the Government of India as per the award of Special Land Acquisition Officer, dated 27.03.1967. The copy of the award is placed at pages 8 to 13 to second Paper Book filed by the assessee. Pursuant to the said acquisition of land by the Government of India, against which the Land Acquisition Collector gave award. Then document of right (Register of Mutation) dated 15.01.1968 was issued an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Act, subject to the provisions of Part VII of the Act, where the appropriate Government is satisfied after considering the report, if any, made under section 5A(2) that any particular land is needed for public purpose, or for a company, a declaration shall be made to that effect, under the signature of the Secretary to such Government or of some officer duly authorized to certify its orders, and declarations may be made from time to time in respect of different parcels of any land covered by the same notification under section 4. After declaration, the Collector is to take order for acquisition of land as per section 7 of LAC Act. Thereafter, procedure has to be followed as per different provisions of the Act for acquisition of land and once the said land has been earmarked for acquisition. Then under section 11 of the LAC Act, the Collector shall proceed to enquire into the objections, if any, which any interested person had stated pursuant to the notice given under section 9, to the measurements made under section 8 and into value of land, at the date of publication of notification under section 4 and into the respective interest of persons claiming the compensation and thereafte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t be withdrawn/abandoned under the provisions of Section 48 of the Act, or under Section 21 of the General Clauses Act, once the possession of the land has been taken and the land vests in the State, free from all encumbrances. (Vide: State of Madhya Pradesh v. V.P. Sharma, AIR 1966 SC 1593; Lt. Governor of Himachal Pradesh & Anr. V. Shri Avinash Sharma, AIR 1970 SC 1576; Satendra Prasad Jain v. State of U.P. & Ors., AIR 1993 SC 2517; Rajasthan Housing Board & Ors. V. Shri Kishan & Ors., (1993) 271(1)(c) of the Act SCC 84 and Dedicated Freight Corridor Corporation of India v. Subodh Singh & Ors., (2011) 11 SCC 100)." 15. Before the Hon'ble Supreme Court, the issue was that where the land has been acquired by the Government and the possession of the land has been taken by the Government, then where the land stands vested in the State, free from all encumbrances provided under section 16 and 17(2) of the Act, no benefit can be taken by the interested person where he had not filed an objection to the notice issued under section 5A, then the land vested in the State absolutely. 16. The Hon'ble Supreme Court vide para 20 and 21 referred to the decision of Hon'ble Supreme Court in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lf challenged. The State neither has the requisite power to reconvey the land to the person-interest, nor can such person claim any right of restitution on any ground, whatsoever, unless there is some statutory amendment to this effect." 18. In view of the ratio laid down by the Hon'ble Supreme Court, where the land is acquired by the Government, then the same vests in the State, free from all encumbrances, as per the provisions of section 16 of LAC Act. Further, the said land is to be used for the purpose for which it was acquired or for any other purpose and the persons whose land is so acquired, he becomes persona non-grata once the land vests in the State. He at best had right to receive compensation for the same. It has further been laid down by the Hon'ble Supreme Court that the State neither has the requisite power to reconvey the land to the person interest nor can such person claim any right of restoration on any ground. 19. Now, coming to the facts of the present case. The land in question which is sought to be included in the net wealth of the assessee for the captioned assessment year was acquired by the Government of India. The assessee company was incorporated i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e lands were acquired for the 1st respondent being a wholly owned government company of the Central Government under the provisions of Part II of the Land Acquisition Act and not under Part VII of the Land Acquisition Act as alleged by the petitioners and secondly the lands vest absolutely in the Government and hence prior permission from the State Government is unnecessary. The State Government has filed its counter to the petition and has confirmed the position that prior permission from the State Government is not required. Mr. Walawalkar fairly stated that the provisions of section 44A are not attracted to the facts of the present case." 20. The Hon'ble High Court thus, gave a mandate with regard to the ownership of land, which was acquired by the Government for the purpose of construction of residential colony of the employees of assessee company, vested absolutely in the Government and since the said lands were acquired for the assessee company, which was wholly owned Government company of the Central Government, there was no merit in the claim of the petitioners that it was acquired under Part VII of the LAC Act. It was further held that the provisions of Part II of LAC A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The assessee has filed on record the copy of Rights (Register of Mutation) dated 15.01.1968, which was issued on 22.02.2002 by the Government / Revenue authority by which the possession of the land was handed over for occupation by the assessee company for residential quarters. The assessee has furnished copy of the said document in Marathi along with English transaction. The perusal of the said document placed in additional Paper Book at pages 1 and 2 reflects that the entry is 15.01.1968 and reads as under: Serial No of entry Nature of right acquire 2287 Date 15/01/1968 In view of the order bearing No.LAQ/8/SR 22/66 dated 09/01/1968 passed by Special Land Acquisition Officer (8) Pune, the possession of th following acquired land, is given to Hindustan Antibiotics Companies Ltd. for construction of quarters, vide Possession Note 10/11/1965 through M.S.M. Chinchwad. Hence, the under mentioned division has taken place. 23. Thereafter, Survey Nos., the Area Cess and the nature of holder from whom the land was acquired is mentioned therein and the remarks by the accepting Officer is "passed on the perusal of Possession Note". The perusal of the above said document of Ri....