AI Drafter 
TaxTMI 
TaxTMI 
2016 (5) TMI 14
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....f the case are that the assessee is an individual filed his return of income for the assessment year 2006-07. During the course of assessment proceedings, under the Income Tax Act, the A.O. noticed that the assessee has owned certain assets, which were liable for wealth tax and accordingly, notice u/s 17 of the Wealth Tax Act is issued calling for return of wealth. The A.O. after considering the relevant information has completed the assessment under Wealth Tax Act and determined the net wealth of Rs. 91,06,951/-. 3. During the course of wealth tax assessment proceedings, the A.O. noticed that the assessee has claimed exemption from wealth tax for two agricultural lands situated at Gollapudi and Ibrahimpatnam. On verification of the deta....
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....ssued a show cause notice and asked to explain why the value of Rs. 39,25,158/- determined, based on the values of sub registrar shall not be adopted for the purpose of wealth tax. In response to show cause notice, the assessee submitted that the value determined by the Inspector of Income Tax, based on the sub registrar value is not correct, as subsequently he has sold the property and as per the registered sale deed, the property is sold for a consideration of Rs. 14,01,000/-, therefore requested to adopt the value as per the sale deed. 5. The A.O., however, after considering the explanations furnished by the assessee, treated the agricultural lands situated at Gollapudi and Ibrahimpatnam, as assets within the meaning of section 2(ea) ....
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....e property was sold for a consideration of Rs. 14,01,000/- on 27.3.2007. Therefore, the value of the property for the previous financial year cannot be more than the market value in the subsequent year. Therefore, the A.O. was erred in adopting the value based on the sub registrar value, ignoring the sale deed furnished by the assessee. 7. The CIT(A) after considering the submissions made by the assessee directed the A.O. to exclude the agricultural land situated at Gollapudi within the meaning of capital asset u/s 2(ea) of the Act. The CIT(A) held that as per the amended provisions of section 2(ea)(v) of the Act, with retrospective effect from 1.4.1993, any land classified as agricultural land, in the records of the Government and used ....
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....Act, with retrospective effect from 1.4.1993, any land classified as agricultural land in the records of the Government and used for agricultural purpose is not a asset and therefore not liable for wealth tax. Therefore, the order of CIT(A) should be upheld. 10. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. has treated agricultural lands situated at Gollapudi and Ibrahimpatnam as assets within the meaning of section 2(ea) of the Act. The A.O. was of the opinion that though, the lands are agricultural lands, they are situated within the 8 kms. from the local limits of the municipality, therefore, liable for wealth tax. It was the contention of the a....
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....th tax. 11. The next issue came up for our consideration is taxability of house property situated at Tirupur. The A.O. determined the value of house property at Tirupur at Rs. 39,25,158/-. According to the A.O., he has determined the value of the property, based on the values obtained from the sub registrar office. The contention of the assessee is that the same property has been sold in the subsequent financial year on 27.3.2007 for a consideration of Rs. 14,01,000/-. Under no circumstances, the value of a property on an earlier date cannot be more than the value of the same on later date. The assessee has filed a paper book containing the copies of sale deed. On verification of the sale deed, we find that though the property has been s....