TaxTMI 
TaxTMI 
2016 (7) TMI 422
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....elected for scrutiny and accordingly notice u/s 16(2) of the Act was issued. In response to the notice, the authorized representative of the assessee appeared from time to time and furnished the details called for. The A.O. after considering the details furnished by the assessee completed the assessment u/s 16(3) r.w.s. 17 of the Act and determined taxable wealth of Rs. 7,34,12,780/-. 3. Aggrieved by the assessment order, the assessee preferred an appeal. Before the CWT(A), the assessee filed a written submission. The CWT(A) after considering the explanations furnished by the assessee partly allowed the appeal filed by the assessee. Aggrieved by the CWT(A) order, the assessee is in appeal before us and raised the following grounds of appeal: 1.0 That under the facts and circumstances of the case the orders passed u/s. 16(3) r.w.s 17 of the Wealth Tax Act, 1957 are contrary to the facts of the case and provisions of law. 1.1 The learned Commissioner of Wealth Tax(A)(in short 'CWT(A)') erred in observing that the subject vacant land is liable for Wealth Tax when the same is held by the assessee as his stock-in-trade. 1.2 The learned CWT(A) ought to have held that ....
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....character of asset, instead of the liability or non liability of the same is to be looked into from the perspective of wealth tax provisions. The assessee purchased the said property for the purpose of commercial exploitation and filed the necessary copies of agreement before the A.O. The A.O. without appreciating the facts brushed aside the evidences filed by the assessee and held that the land held by the assessee is an urban land, coming within the definition of assets, u/s 2(ea) of the Act. The A.R. further submitted that the impugned land held by the assessee is under dispute. As per the provisions of section 2(ea) of the Act, any land on which construction of a building is not permissible under any law for the time being in force, then the same shall not be considered as asset for the purpose of wealth tax. The asset held by the assessee is under civil dispute and there is an injunction order from the court of Third additional Chief Judge, City Civil Court, Hyderabad vide OS No.248 of 2003 dated 23.7.2003. The A.R. further submitted that these facts have been brought to the knowledge of the developer by way of memorandum of understanding dated 31.7.2007 vide clause no.3.1 of ....
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....nt of affairs before the assessing officer and claimed that the impugned land is an immovable property. Just because land is under Joint Development, it cannot be considered that the asset is held for the purpose of commercial exploitation thereby it is classified as stock-in-trade. The assessee has failed to prove that the impugned land is stock-in-trade with any evidences. On the other hand, the income tax return filed for the assessment year 2009-10 in ITR form-2 which is meant for individual and HUFs not having income from business or profession, abundantly proves that the assessee is not involved in any business. By his conduct, the assessee proved that he is not into the business either in the past or in the future. If the JDA is entered for development of the property, it is for the builder who comes under the activity of business but not the assessee. The assessee has purchased the land as an investor, consequently any gains from the land would be assessable under the head income from capital gains. Therefore, we are of the view that the assessee has failed to prove that the impugned land held by him is stock-in-trade. 8. Coming to the alternative plea of the assessee. T....
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....et within the meaning of section 2(ea) of the Act. The relevant portion of the order is reproduced hereinunder. "Sec. 2(ea) defines 'the assets' in relation to the assessment year commencing on 1st April, 1993 and subsequent assessment years and includes in it 'urban land'. The expression 'urban land' has been defined in Expln. (b) to s. 2(ea). The definition of urban land excludes from the definition of urban land any land on which construction of a building is not permissible. The land which is unbuildable under any law for the time being in force is not an urban land and, as such, is not an asset within the meaning of s. 2(ea). Consequently, the land which is not buildable under any law for the time being in force is not included in assessable wealth of a person. Since the property in question consists of a part of a land which is buildable and part of the land which is not buildable, the AO ought to have excluded the value of the portion of the land which was unbuildable while computing the wealth of the appellants. Perusal of the order of the AO as well as the appellate authority does not disclose what portion of the said land was buildable and what portion was not buildabl....