TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 1656
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.... On the facts and circumstances of the case and in law, the Ld. CWT (A) erred in not appreciating the fact that the approval to buy and hold the agriculture land by the company i.e. M/S Valuable Properties Pvt. Ltd. which is not engaged in the agriculture work granted by state government only for rapid industrial development of the state. 2. On the facts and circumstances of the case and in law, the Ld. CWT (A) erred in not appreciating the fact that the assessee company was enabled to buy and hold the agriculture land by making an amendment u/s 63-1A(1) of the BOMBAY TENANCY AND AGRICULTURAL LANDS ACT, 1948 and the purpose of the amendment and the section was to allow the investor company to hold land for the sole purpose of development of infrastructure. 3. On the facts and circumstances of the case and in law, the Ld. CWT (A) erred in treating the land which was approved by the state government only for industrial purpose as stock in trade. 4. On the facts and circumstances of the case and in law, the Ld. CWT (A) erred in not appreciating the provisions of section 2(ea) of Wealth Tax Act, 1957 which is totally applicable as per the facts of this case. Further, The revenu....
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....uable Properties Private Limited (VPPL) the issue of taxability under the Wealth tax Act 1957, was verified. It is seen that the assessee holds huge Urban Land as reflected in its balance sheet which needs to be verified for the applicability of the Wealth tax Act. The search conducted in case of M/s VPPL has revealed several facts regarding the urban land held by assessee. These facts as described in the appraisal report containing the findings of the search are discussed to bring out the true nature of the said urban land held by the assessee. URBAN LAND The infrastructure projects were initiated after obtaining the permission from the state Government of Maharashtra for buying and holding of land. In the balance sheet of M/s Valuable Properties Private Limited, as on 31st March 2010, current liabilities are reflected as Rs. 930 crore, against which inventories in the form of land is amounted to Rs. 926 crore. These current liabilities consist of mainly advances received for land. The company as on 31st March 2010 had shown the land cost amounting to Rs. 926 crore. Project Energy City, Panvel The assessee M/s Valuable Properties Private Limited is developing the 'Energy....
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....urnished that all these land falls within the Municipal limits of 8 km of the Panvel Municipal Council. It can be seen that the State Government of Maharashtra has allowed buying of the said land for the sole purpose of industry. Secondly, the land that the assessee has bought falls within the 8 km area from the boundary of Panvel Municipal Corporation. 7. The above discussion of the nature of the Urban land held by the assessee has to be compared with the definition of the taxable asset 'Urban Land "as clarified u/s. 2(ea) of the Wealth Tax Act." 3. During the reassessment the assessing was of the view that the land acquired for infrastructural development was not used for more than three years from the date of acquisition. The assessing officer issued a show cause notice as to why the assessee should not be saddled with Wealth tax liability in respect of land in Panvel. The assessee filed its reply dated 23.03.2016. In the reply the assessee stated that the land was held by the assessee at the stock in trade, it was clearly not exigible for Wealth tax. 4. The reply of assessee was not accepted by assessing officer. The assessing officer treated the cost of aforesaid land as....
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.... Trade' for a period of 10 years from the date of its acquisition. The learned AR further submits that the objection of assessing officer as evident from paragraph 6.1 of the assessment order was that land was acquired for industrial purpose and since it remained unused for more than three years from the date of acquisition, it formed part of Wealth of the assessee. The learned AR clarified that it was never the case of assessee before the assessing officer that land is not chargeable to wealth tax because it is industrial land. The case of assessee, all along, was that piece of land was purchased for construction of his special Township; that it formed part of Work-In-Progress of the assessee and, hence, it is Stock in Trade. This fact is evident from the balance-sheet of the assessee for the year under consideration, which has not been disputed by assessing officer. The exception given in the definition of the term 'Urban Land', and any land held by assessee as the 'Stock in Trade', shall not form part of 'Urban Land'. Therefore, learned AR submits that the finding recorded by assessing officer and the decision arrived by him were against the letter and spirit of the statutory pr....
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....interference. 10. We have considered the rival submission of the parties and have gone through the orders of authorities below. We have also deliberated on various case laws relied by lower authorities as well as by learned representative of the parties. Though, the revenue has raised multiple grounds of appeal, however, in our considered view the sole and substantial question for our adjudication is as to whether the piece of land in Pineville held by the assessee was its Stock in Trade, or taxable within the provisions of Wealth Tax Act. As we have already noted that facts of all three assessment year under consideration are identical, therefore, our decision would be applicable for all three Assessment Years. 11. As we have recorded earlier that the case of assessee was reopened pursuant to a search operation on the assessee group on 10th April 2013. The assessing officer before issuing the notice recorded the reason which we have already mentioned in earlier part of this order. During the reWTA assessment, it has come on record that assessee is developing a project in the name of "Energy City", spread over 1600 acre of land at Panvel. The project is duly approved by State Gov....
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....er (Appeals) concluded that the land in question would not fall within the definition of Urban Land being Stock In Trade and business asset of the assessee. 12. We have noted that in the reasons of reopening the Assessing Officer herself has recorded that in the balance sheet of assessee as on 31.03.2010, the current liabilities are reflected as Rs. 930 crore against which inventories in the form of land is amounted to Rs. 926 crore, these current liabilities consist of mainly advances received for land. The Assessing Officer despite recording the liabilities against the land, failed to appreciate that undoubtedly the land was Stock in Trade of assessee. Furthermore, Explanation 1(b) attached with section 2(ea) of the Act clearly specified that any land held by assessee as 'Stock in Trade' for a period of 10 year from the date of acquisition, will not include in the definition of 'Urban Land'. No contrary fact is brought to our notice despite the fact that the assessee throughout the proceedings taken a firm stand that the land is a forming part of their stock in trade. We are also in agreement with the submissions of the ld AR for the assessee that that as per section 2 (m) of We....