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2015 (8) TMI 47 - ITAT HYDERABADWealth tax - Claim of exemption - Urban land - Revenue Authorities assessed the value of the land as on valuation date - AO held the assessee to be liable to penalty u/s 18(1)(c) as the assessee was entitled under the ULCA to make an application for regularisation of the land and that the assessee had on the one hand, not even made such an application and on the other, claimed exemption from wealth tax on this ground - Held that:- Out of the total land of 1790 sq.meters, there is no dispute with reference to the fact that the land is subjected to proceedings under the ULCA. There is also no dispute that the ULCA Authorities have declared 790 sq. meters as excess land. Even though the ld CIT (A) has stated that final statement u/s 9 of ULCA had not been prepared, it was the contention that the assessee has preferred to make an application u/s 20 for exemption for surrender of excess land. It is also a fact that the said exemption was granted on 7.4.2008 i.e. beyond the A.Y under consideration. It is also a fact that the assessee is not certain about which portion of the land being 790sq.meters declared excess would be demarcated and acquired by the Govt. Therefore, there is uncertainty not only with reference to the right of construction but also which portion of the land would be allotted to the assessee. In view of this uncertainty, we cannot value the property as per the Sub Registrar valuation adopted by the AO holding that the assessee has complete rights over the property. Further as per Explanation-1 of section 2(ea) it has been categorically stated that where construction of building is not permissible under any law for the time being in force, the same does not come under the definition of asset for Wealth Tax purposes. There is no dispute that the land in question is covered by the ULCA and the assessee can neither alienate the land, nor construct any building thereon. Therefore, since the asset on valuation date is restricted by the ULCA and further exemption was granted only on 7.4.2008, we are of the opinion that the Revenue Authorities wrongly assessed the value of the land as on valuation date at ₹ 7.49 crores, we direct the AO to exclude this amount - Decided in favour of assessee.
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