2005 (10) TMI 64

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....ns 2.25 acres of agricultural land within the Corporation of Tirunelveli and its value is Rs. 78,75,000. The assessee claimed exemption under section 2(ea) of the Wealth-tax Act (hereinafter referred to as "the Act") on the ground that those lands are agricultural lands and construction of building thereon is not permissible under the Urban Land Ceiling Act. The Assessing Officer found that the land has the potential to be used for non-agricultural purposes subject to prior permission from the concerned authorities. The Assessing Officer also found that a hospital building has been constructed on the adjacent land. Therefore, the Assessing Officer decided to assess the said land also for taxable purposes and brought the value of Rs. 78,75,0....

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.... of law: "Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the value of 2.25 acres of the land situated within the corporation limit of Tirunelveli is exempt from the wealth-tax as agricultural land, contrary to the provisions of section 2(ea), Explanation (b) of the Wealth-tax Act?" It is seen from the records that for the assessment years 1997-98 and 1998-99, the assessee filed returns of wealth on February 9, 1998 and August 21, 1998 admitting wealth of Rs. 15,000 and Rs. 25,000 and the returns were accepted under section 16(1) of the Act on March 27, 1998 and July 26, 1999 respectively. As the Assessing Officer had reason to believe that wealth had escaped assessment for those assessment ....

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.... and (ii) the assessee must have purchased the land within a period of two years after the sale of the above land for being used for agricultural purposes. It is well settled in the case of CIT v. Smt. Savita Rani [2004] 270 ITR 40 (P&H), wherein it is held that the land being located in a commercial area or the land having been partially utilised for non-agricultural purposes or that the vendees had also purchased it for non-agricultural purposes, were totally irrelevant considerations for the purposes of application of section 54B. In the abovesaid case, the assessee an individual sold 15 karnals, 18 marlas of land out of her share in 23 karnals, 17 marlas land during the financial year 1990-91, relevant to the assessment year 1991-....