2017 (11) TMI 249

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.... 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming the action of Ld. AO whereby he has not allowed deduction of debts of Rs. 1,04,59,830/- claimed to be utilized for acquiring the taxable assets included in the net wealth of the assessee. 3. That appellant prays for leave to add, alter amend the aforesaid grounds of appeal at or before the time of hearing of appeal." 3. Briefly stated the facts are that the case of the assessee was reopened u/s 17 r.w.s. 16(3) of the Wealth Tax Act, 1957 was framed vide order dated 31/03/2015. While framing the assessment, the Assessing Officer made addition on wealth of Rs. 1,74,10,005/- and thus computed total wealth of Rs. 2,24,80,847/-. Against the wealth declared by the assessee in his wealth tax return of Rs. 50,70,842/-. Aggrieved by this, the assessee preferred an appeal before Ld. CWT(A), who after considering the submissions dismissed the appeal. 4. Ground no. 1 is against confirming the addition of Rs. 1,74,10,005/- in return wealth of the assessee by treating unapproved/agriculture plots/lands as taxable assets. 4.1 Ld. Counsel for the assessee reiterated the submis....

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....n and recover the cost of such pulling down, demolition or removal from the person or authority concerned" It is clear from above submission that in unapproved schemes or where JDA patta has not been issued no construction work can be carried out by any person. Since the assessee's plots/lands are not approved by JDA or JDA Patta has not been issued, these plots are not permissible for construction. Further, the JDA patta is not issued, the ownership of the land is vest in Government. This may be seen from following:- Category of land Owner Assessee's status Agricultural Land Government The assessee has lease right to cultivate 90B completed Government. As per section 90B/90A of Rajasthan Land Revenue the land vest in Government and in revenue records the name of JDA is entered as owner The assessee has possession holder. JDA patta issued Owner assessee     Therefore, the assessee cannot raise construction in first two categories of land and the first two category of land are not permissible for construction. The construction of storage, and other utilities and facilities in agricultural land have direc....

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....e plots/lands as taxable assets. The humble assessee prays your honor kindly to set aside the order of lower authorities and delete the addition." 4.2 On the contrary, Ld. D/R opposed the submissions and supported the order of the authorities below. 4.3 We have heard the rival contentions, perused the material available on record and gone through the order of the authorities below. The contention the assessee is twofold. Firstly, that the asset is exempt in view of the provisions of Section 2(ea)(iv) of Wealth tax Act. As on this land the construction is not permissible. Secondly, the assessee has disputed the valuation adopted by the Assessing Officer. It is submitted that when the valuation is disputed, the AO ought to have referred the valuation to DVO. We have given our thoughtful consideration to the contention of the assessee. We find that the Assessing Officer has not made any enquiry from the concerned authorities i.e. Jaipur Development Authority whether the construction of building is permissible on the land further no effort is made as to ascertain what is the fair market value of the assets. Under these facts, we therefore set aside the order of the authorities....

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....) (iii) Hon'ble ITAT Jaipur Bench in M/s Salasar Overseas Pvt Ltd in WTA NO. 2 & 3/JP/2012 (Assessment Years : 2007-08 & 08-09) (Copy enclosed-PB 49-55) has held as under:- "We have heard parties with reference to material on record and case laws brought to our notice. The Ld. CWT (A) in appeal has returned a finding of fact that the advances received against plot booking and JDA charges have been utilized for acquisition of gold and car. This finding of fact has neither been assailed by the revenue nor shown to be perverse on facts. The same, therefore, attains finality. We also find and the record reveals that the amount of advances raised by the assessee against plot booking and JDA charges were repayable in cash or kind on the relevant valuation date and is a debt incurred by the assessee. The same are not shown to have been treated as income nor were assessed as assessee's income of the years under consideration in framing income tax assessment for respective years in appeal. Having utilized the amount of debt for creation of the assets i.e. motor car and jewellery/bullion, it is palpable that the debt incurred has a direct nexus with the acquisition ....