TaxTMI 
TaxTMI 
2021 (3) TMI 76
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....ferent assessees are directed against separate, but identical orders of the learned Commissioner of Income Tax (Appeals)-19, Chennai, dated 25.06.2019 and pertains to the assessment years 2011-12 to 2015-16. Since, the facts are identical and issues are common, for the sake of convenience, these appeals are heard together and are being disposed off by this consolidated order. 2. All the assessees have filed more or less common grounds of appeal for all assessment years. Therefore, for the sake of brevity, grounds of appeal filed in the case of Shri S.Peter for the assessment year 2012-13 are reproduced as under:- 1. The order of the Learned CIT (A) and Assessing officer is contrary to law and facts of the case. 2. The Ld. CIT(A) erred in importing a very narrow and restricted meaning to the word "Property" used in the sections 2 and 5 of the Wealth Tax Act, 1957. The Ld. CIT(A) erred in not comprehending that the word 'property' is of widest import and covers all types of assets. 3. The Ld. CIT(A)'s understanding that the word 'property' in section 5(i) is restricted only to immovable property being building and no other properties is erroneous and bad....
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....y withdrew exemption u/s.11 for various violations of section 13(1)(c) of the IT Act, and thus, trusts itself admitted it to be assessed in the status of 'AOP' for the years under consideration. Hence, exemption u/s.5(i) of the WT Act is not available for the impugned assets. The AO further was of the opinion that there was no transfer of title itself, in favour of the trust and hence, the assets cannot be treated as assets owned by the trust for charitable or religious purpose in order to give the benefit of exemption u/s.5(i) of the WT Act. Accordingly, the AO computed Wealth Tax on various lands held by the assessee and given on lease for a period of 99 years to two educational trusts. 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee has reiterated his arguments taken before the AO and claimed the benefit of exemption u/s.5(i) of the WT Act on various lands owned and given on lease to two educational trusts. The assessee further submitted that the purpose of introduction of Wealth Tax is to tax the assets that are kept unproductive, non-essential and idle. There is no intention to levy wealth....
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....et as defined u/s.2(ea)(v) of the WT Act, and consequently, the same is not eligible for exemption u/s.5(i) of the WT Act. Accordingly, rejected arguments taken by the assessee and confirmed the findings of the AO to levy tax on lands owned by the assessee and given on lease to Trusts. Being aggrieved by the CIT(A) order, the assessee is in appeal before us. 6. The ld.AR for the assessee referring to additional grounds of appeal filed, submitted that the lower authorities went on to decide the issue in a narrow compass on the basis of arguments advanced by the assessee that the lands are held under the trusts for charitable purpose without considering the fact, that the lands owned by the assessee were given on lease to trusts, where the trusts have constructed buildings with the permission of appropriate authority and further, once the land is occupied by any building, which has been constructed with the approval of appropriate authority, then said land is outside the purview of definition of 'urban land' for the purpose of Wealth Tax. The ld.AR further submitted that the assessee has leased out lands to trusts for 99 years and the trusts have constructed buildings on the said ....
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....ritable or religious nature in India. In this case, the lands are owned by the assessee but given on lease to trusts. Although, the trusts have constructed building on leased lands but the trusts itself had withdrew exemption claimed u/s.11 of the IT Act, for various violations as referred to u/s.13(1)(c) of the IT Act and thus assessed itself as an 'AOP' and hence, the arguments of the assessee that the lands are held under the trusts for charitable purpose is incorrect. The ld.DR submitted that the ld.CIT(A) after considering relevant submissions has rightly held that lands are not eligible for exemption u/s.5(i) of the WT Act and therefore, his order should be upheld. 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The solitary issue that came up for our consideration from the given facts and circumstances of this case is, whether the lands owned by the assessee and leased to trusts comes under the definition of 'asset', as defined u/s.2(ea) of the WT Act, or the assets held by him under the trusts or legal obligation for any public purpose of a charitable or religious nature in India, which is exe....
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....of the assets from Wealth Tax with the objective of stimulating investments in productive assets. It is in this context that the lands occupied by any building which has been constructed with the approval of appropriate authority is excluded from the definition of 'urban land' and on plain reading of the said clause, it is clear that in order to avail the benefit, only condition required to be satisfied is, land is occupied by any building and such building has been constructed with the approval of appropriate authority. In the present case, the impugned lands are occupied by buildings and said construction was approved by appropriate authority. In this regard, assessee has filed various additional evidences including copy of approvals for construction of building and copy of approval for running educational institutions, copy of each building plan, etc. Therefore, we are of the considered view that lands on which any building is constructed with the approval of appropriate authority cannot be considered as urban land, which comes under the definition of asset as defined u/s.2(ea) of WT Act. But, the assessee has taken this argument in light of various additional evidences for the ....
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....e, there is no doubt for whatsoever with regard to the fact that the impugned lands are held by trusts for charitable purpose. Although, the AO has assigned a reason to deny the exemption that the trust has voluntarily withdrew exemption claimed u/s.11 of the IT Act, but fact remains that even if exemption is denied u/s.11 for various reasons including violation of section 13(1)(c) of the IT Act, but tax can be levied only on the portion of income that violates provisions of section 13(1)(c) of the IT Act, but not on whole income. However, that does not take away the right of the assessee to claim exemption u/s.5(i) of the WT Act, in respect of those assets which are held under the trusts for charitable purpose. We, further noted that although the AO has granted benefit of exemption to the assessee, wherever the trust deeds are registered but the ld.CIT(A) has denied exemption in respect of lands, by holding that in order to be eligible for exemption u/s.5(i) of the WT Act, then the trusts should own land and building or commercial properties but such exemption cannot be given to vacant land. We do not ourselves subscribe to the findings of the ld.CIT(A), because nowhere in the pro....
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....t lands on which buildings are constructed with the approval of appropriate authority and hence, in our considered view these lands cannot be brought to tax as urban lands within the meaning of asset, as defined u/s. 2(ea) of the WT Act. Therefore, we are of the considered opinion that the assessee is also entitled for exemption u/s.5(i) of the WT Act, because the lands are held by him under a trust for charitable purpose because said lands were given on lease to a trust and the trust has used the lands for running various educational institutions, which comes under the definition of charitable purpose. Therefore, for all reasons the impugned lands are outside the scope of the Wealth Tax. But, the fact remains that certain additional evidences filed by the assessee including copies of sanction plan, copies of approval letters issued for running educational institutions are not submitted before the AO. Therefore, for limited purpose of verification of additional evidences filed by the assessee, the matter has been set aside to the file of the AO and direct him to verify the additional evidences filed by the assessee and allow appropriate relief to the assessee. 13. In the result,....