|
Advanced Search Options
Wealth-tax - Case Laws
Showing 41 to 60 of 3697 Records
-
2021 (1) TMI 974 - ITAT CHENNAI
Wealth tax assessment - assessee has challenged inclusion of residential property at Mc Nichols Road on the ground that said property was used for the purpose of residence and hence the same is exempted u/s.5(1)(vi) - assessee has also challenged valuation adopted by the AO on the ground that the AO ought to have followed the method of valuation prescribed under Schedule III to Wealth Tax Act, whereas he has arrived at the value on the basis of market value which is incorrect - HELD THAT:- In this case, on perusal of facts, we find that although assets have been distributed among the family members in pursuant to MOU cum Deed of family settlement, but the contention of the assessee before the Hon’ble High Court is that he did not receive said assets. We, therefore, considering facts and circumstances of the case, are of the opinion that AO as well as CWT(A) were erred in assessing the value of residential house property and diamonds for taxation for the impugned assessment years without taking into account the dispute pending before Hon’ble High Court of Madras.
Residential property at Mc Nichols Road, the claim of assessee that said property was used for own residence and consequently outside the purview of definition of asset as defined u/s.2(ea) of the Act. Although, the assessee claims that said property was used for own residence, but no evidence has been placed before the authorities or even before us to prove that said property was used for own residence. No doubt, in case the property is used for own residence then the same is exempt u/s.5(1)(vi) of the Act. But, it is for the assessee to prove with necessary evidence that said asset is used for own residence. In this case, the assessee has not placed any evidence on record to justify his stand. Therefore, we are of the considered view that the issue needs to be reexamined by the AO in light of claim of the assessee that said property is used for own residence. Appeals filed by the assessee allowed for statistical purpose.
-
2021 (1) TMI 973 - ITAT DELHI
Wealth tax assessment - additions in the valuation of jewellery - gross weight of jewellery as on 31.02.2012 declared in the wealth tax return was different from the gross weight of jewellery as on 31.03.2013 - HELD THAT:- As during the course of search and subsequent opening of lockers the jewellery of all the family members were mixed up and valued, therefore, for the adjudication of this quarrel, we have considered the gross weight of jewellery of all the family members taken together as declared by them in their respective Wealth Tax Returns and as found at the time of search.
No suppression in the valuation of jewellery and, therefore, enhancement made by the CIT(A) on this account is bad in facts and deserves to be deleted. We direct the WTO to delete the impugned enhancement in the value of jewelery from the hands of all the appellants.
Enhancement in the valuation of property - Denial of exemption u/s.5(vi) of the Wealth Tax Act - It would be pertinent to mention here that the claim of exemption is being allowed to the appellants in earlier assessment years and it is only in the orders under consideration, the CIT(A) thought that the appellants are not eligible for the claim of exemption. The basis of reasoning given by the CIT(A) is that D-6/5, Vasant Vihar and E-27, Vasant Marg, New Delhi consists of more than one residential unit and, therefore, the appellants are eligible for exemption for only one residential unit. We find that D-6/5, Vasant Vihar and E-27 Vasant Marg, New Delhi are multi storey building. At this point we would like to refer to the decision of the Hon’ble Kerala High Court in the case of CIT Vs. Nazima Nizam 64 taxman 375 wherein the Hon’ble High Court allowed the exemption in respect of assessee’s building which consisted four shop rooms.
In the property D-6/5, Vassant Vihar, Lata Goyal is the owner of ground floor and first floor belongs to Monila Goyal and second floor belongs to Lata Goyal and Kanti Kumar Goyal E-27, Vasant Marg is owned by Lata Goyal. Lata Goyal has claimed exemption in respect of E-27, Vasant Marg and has included the value D-6/5, Vasant Vihar in her Wealth Tax Return.
Treating a multi floor house as separate units is incorrect and, therefore, denial of the claim of exemption by CIT(A) thereby enhancing the value of property is bad in law and deserves to be deleted.
Direct the WTO to delete the impugned addition of enhancement in the valuation of property from the hands of the appellants.
-
2021 (1) TMI 381 - ITAT MUMBAI
Exigibility of offshore assets of an offshore trust to wealth tax - HELD THAT:- Private discretionary trust was established by a non-resident with the offshore assets, which is irrevocable and the beneficiaries consist of lineal descendants of Late Shri Pratap Malpani and Late Ashokvardhan Birla together with charitable organizations.
The trust deed empowers the trustees to control the offshore assets and in case of distribution, it can be on the basis of trustees discretion. Even though the trust was established in Guernsey, the provision of trust is universally accepted and consistently followed worldwide. Even Indian Trust Act, 1882 is followed consistently and it is enacted in pre-independent era.
In this case, it was given to assessee’s father and mother. After their lifetime, it devolved on the assessee. Merely because, it is exercised by the assessee, it does not make the trust to lose its identity. The trust still will continue with the new trustees. The properties attached to the trust will continue to be the properties of the trust. It is wrong to presume that the properties governed by the trustee will be considered as the properties of the individual beneficiary who exercises the appointment of trustees.
In the given case, no doubt the assessee is vested with the power to appoint or remove the trustees, does not change the status of the trust and its independent functioning.
Admittedly these trusts and the companies managed by the trustees were not declared by the assessee in the return of wealth. It is pertinent to note that the trusts were created in 1989 and the assessee was nominated as the beneficiary by the Late Shri Pratap Malpani. It is fact on record that there are no investments, which were made by the assessee or the investments were moved from India.
There was no obligation on the part of assessee to declare the wealth /assets in the ‘ROI’ upto AY 2012-13. The declaration of details of foreign bank account and trust were mandated only from AY 2013-14.
The offshore assets held by the offshore trust, which is irrevocable discretionary trust in which assessee is one of the beneficiary, who happens to be bestowed with right to appoint /re-appoint the trustees, it does not inherit the right or control over the trust. As per the declaration of the trust, the trust remains an independent entity and taxable entity outside India. The entities controlled by the trust are independent taxable entities outside India. Therefore, assessee can only be a beneficiary and remain a beneficiary.
We are in agreement with the submission of the assessee that the narrow remit of 'assets' under section 2(ea) of the Wealth Tax Act, held to be an exhaustive definition, does not permit exigibility of offshore assets of an offshore trust to wealth tax in the hands of the Assessee. We hold that there is no room for intendment in a taxing statute.
Addition towards deposits in foreign bank accounts - AO treated the above deposits in banks belongs to the assessee by observing that the assessee is the beneficial owner - HELD THAT:- CWT(A) has clearly indicated that the addition affirmed by Ld CWT(A) belongs to the offshore companies and offshore discretionary trusts. Since the ownership of these bank accounts are with the offshore entities, the tax authorities cannot treat the same to be part of wealth of the assessee and also the definition of the assets does not include the bank balance as part of the taxable assets as per the Wealth Tax Act. Even though, in the KYC compliance, the assessee is mentioned as the beneficiary, it does not alter the fact that assessee is one of the beneficiary, and it is fact on record that assessee is not the only beneficiary. Therefore, we have to consider the actual legal ownership rather than deemed ownership which is without any evidence on record, to show that assessee has the legal ownership on bank account and other assets held by Trust.
Addition made by the AO on account of bank balance of the offshore entities as part of wealth of the assessee is farfetched and without any evidence of ownership as well as the definition of assets does not include the offshore bank account as part of assets as per the Wealth Tax Act, 1957. Accordingly, the ground raised by the assessee in this regard is allowed.
Validity of reassessment on the ground that reasons recorded were not communicated to assessee - HELD THAT:- In the instant case, admittedly, the reasons recorded for reopening the assessments were never furnished to the assessee by the AO. This is a non-curable defect and vitiates the entire re-assessment proceedings. The entire re-assessment proceedings becomes null and void for non-supply of reasons recorded to the assessee.
Assessee challenged the rejection of filing of revised return of wealth which was filed revising the return filed in response to notice issued u/s 17 of the Act - We notice that the assessee filed the return u/s 17 on 13.03.2015 which was itself belated. As per the provision of section 17(1), AO has to serve the notice requiring the assessee to file the return within such period as may be specified in the notice. We notice that the assessee had filed the return only upon serving of show cause notice u/s 35B of the Act. Therefore, it is clear from the fact that the return filed u/s 17 is belated. The assessee can revise the return which was filed u/s 15 of the Act. Since the provision is very clear that the assessee has to file the return u/s 17 within the time prescribed in the notice and if belated, the assessee cannot revise the return treating the same as filed u/s 15. Therefore, we are in agreement with the findings of Ld CWT(A). Accordingly, the ground raised by the assessee in this regard is dismissed.
AO treated the additional jewellery declared in revised return as undisclosed jewellery - After considering the fact in this case, we notice that the jewellery found during the search belongs to assessee and other family members. The assessee has disclosed the additional jewellery only after reconciliation of jewelleries of various family members and it is not something which was unearthed by AO. AO has rejected the revised return filed by the assessee and the AO cannot once again take the figures from the revised return and treat the same as undisclosed wealth. When the AO rejects the revised return then the whole return is invalid. In case AO makes addition from the revised return then it means that he recognizes the revised return. Therefore, we reject the contention of the tax authorities to treat the additional wealth declared in revised return as undisclosed wealth. The AO has to reconcile the jewellery found during the search with the return filed u/s 17 and not from the revised return. Therefore, we allow the ground raised by the assessee.
Reconciliation of jewellery found during the search and jewellery declared by the assessee in his return filed in response to notice u/s 17 - There is substantial amount of jewellery found and it belongs to the assessee as well his late parents and other family members. It is also fact that for this purpose, the assesssee had to revise the belated return filed in response to notice u/s 17. After considering the facts in the submissions and assessment records, in our considered view, assessee should be given one more opportunity to reconcile the wealth and considering the complexities in this case, we direct the AO to redo the reconciliation of the jewelleries of all the family members and ascertain the correct jewellery belonging to the assessee and complete the assessment after giving proper opportunity to the assessee. Accordingly, we remit this issue back to the file of AO with the aforesaid direction. Accordingly, the ground raised by the assessee is allowed for statistical purpose.
-
2020 (12) TMI 1059 - ITAT CHENNAI
Wealth tax assessment - whether property was let out and rental income was shown in the income tax returns filed for the relevant assessment years or not? - claim of the assessee that none of the assets are coming within the meaning of assets as defined u/s.2(ea) of the Wealth Tax Act, 1957, therefore, one more opportunity of hearing may be given to the assessee to go before the Assessing Officer to explain with necessary evidence and prove that assets are not coming within the ambit of Wealth Tax Act - HELD THAT:- As considered the arguments of the assessee in light of the fact that the learned CWT(A) has decided the appeals without waiting for remand report called for from the Assessing Officer despite the fact that he himself has called for remand report regarding certain additional evidences filed by the assesse. Therefore, we are of the considered view that appeals filed by the assessee needs to go back to the file of the Assessing Officer to re-verify the averments made by the assessee in light of various evidences and to decide whether those assets are coming within the meaning of asset as defined u/s.2(ea) of the Wealth Tax Act, 1957. Hence, we set aside both the appeals filed by the assessee to the file of the Assessing Officer and direct him to redo the assessment after considering various evidences filed by the assessee.
-
2020 (12) TMI 750 - ITAT BANGALORE
Wealth tax assessment - property which is subject to wealth tax by the AO is not residential or commercial property and it is an industrial property not liable for wealth tax - rental income from the said property was treated as income from house property. According to the assessee, it is not an asset liable for wealth tax - Assessing Officer treated it as an asset liable for wealth tax - HELD THAT:- The provisions of the Act are clear and categoric that all immovable assets falling within the definitions are to be included as the wealth of the assessee unless the same are excluded by the exclusion clause.
On reconstruction of the definition clause, after amendment w.e.f 1st April, 1997, commercial properties are to be included in the net wealth of the assessee and exemption is being allowed to such ‘house’ of the assessee which is occupied for carrying out his business or profession by assessee himself, as it is provided in the sub clause (3) to s. 2(ea)(i) of the Act, business or profession carried on by him.
The portion rented out by the assessee against which compensation has been received and assessed as business income is the portion in which tenant of the assessee is carrying out his business or profession. Mere assessment of the rent or compensation under the head ‘business income’ does not commensurate with the assessee carrying on his business or profession in the said property. In the facts of the present case, the assessee is not carrying on the business of letting out properties.
Accordingly, the portion of property which is occupied by the tenant is to be included as an asset within the definition provided in section 2(ea)(i) of the Act at the relevant time. If an asset is used for the purpose of business or profession then it is not an "asset" for the purpose of taxability under WT Act.
Hon'ble Bombay High Court in the case of Parekh Traders [1983 (9) TMI 39 - BOMBAY HIGH COURT] wherein it was held that property owned by the assessee subject to letting year to year, income on which taxed as “income from house property” so as to take advantage of deduction u/s.24 of the Act and treating the same property as business asset to claim exemption u/s.2(ea) of W T Act. In the present case also the assessee’s income from letting out the property is assessed as income from house property and the assessee has availed deduction u/s.24 of the Act and for the purpose of wealth tax it cannot be considered as business asset so as to exempt from wealth tax. In our opinion, it is rightly to be considered as an asset liable for wealth tax.
Value of industrial land to be reduced from value of the factory building so as to ascertain the net asset value - The assessee in this case not demonstrated that industrial land is not part of the factory building let out to the tenant. Being so, it should be considered as part of the factory building and to be included in the asset liable for wealth tax.
Notional interest computed by AO on the deposit received by the assessee to be excluded from net maintainable rent - It is appropriate to consider the annual value considered by the Assessing Officer as per Section 23 of the Income Tax Act for the purpose of income tax assessment so as to determine the net maintainable rent for the purpose of wealth tax. The Assessing Officer in the same assessment year cannot consider one rent for determining the annual value for the purpose of Income Tax and different rent for wealth tax purpose. Accordingly, we direct the Assessing Officer to adopt the same annual value as per Section 23 of IT Act for determining the net maintainable rent. Accordingly, he determined the gross maintainable rent and correspondingly he shall give deduction towards municipal tax and G.M.R. It is ordered accordingly.
-
2020 (12) TMI 149 - ITAT PUNE
Wealth tax assessment - exemption claimed under Sec.5(vi) of the Wealth Tax Act in respect of residential flat at Mega Polls denied - assessee had not filed the documentary evidence in support of the exemptions claimed - Addition to the returned wealth on account of cash on hand - HELD THAT:- Assessee had claimed exemptions of two properties citing the provisions of Wealth Tax Act. Though the Assessing Officer mentioned that in the absence of evidence in support of the exemptions claimed, denied the exemptions but it is not clear as to what details were required to grant the relief as claimed by the assessee.
Addition to the returned wealth on account of cash on hand, the material on the record suggests that the cash was seized in the Financial Year 2009-10, whereas, we are concerned for the Financial Year 2010-11. There is no reference to any material suggesting the availability of cash on hand on 31.03.2011.
Thus in the interests of the justice, the matter is remanded back to the file of Assessing Officer for fresh adjudication in accordance with law after affording a reasonable opportunity of being heard to the assessee. - Appeal filed by the assessee is partly allowed for statistical purposes.
-
2020 (12) TMI 148 - ITAT CHENNAI
Wealth tax assessment - assessing the value of land at Kelambakkam and Navalur - exemption of 500 sq.metres of any plot u/s.5(1)(vi) of the Wealth Tax Act - HELD THAT:- Since the assessee is not having a residential house and has not claimed any exemption u/s.5(1)(iv), then he is entitled to claim exemption u/s.5(1)(vi), any of the plot within the limits of 500 sq.metre area. The area of the land at Kelambakkam is very well within the limit specified, therefore, the AO is directed to exempt the value of Kelambakkam land u/s.5(1)(vi) of the Wealth Tax Act - Assessee’s appeal is allowed.
-
2020 (11) TMI 73 - MADRAS HIGH COURT
Wealth tax assessment - Nature of land - ‘urban land’ - whether the land owned by the respondent – assessee would not fall within the definition of the expression ‘urban land’ under Section 2(ea) of the Wealth Tax Act - HELD THAT:- As decided in [2020 (10) TMI 313 - MADRAS HIGH COURT] CIT-A has recorded the factual finding that the land, which is unbuiltable under any law for the time being in force, is not an urban land and as such, is not an asset within the meaning of Section 2(e) (a) of the Wealth Tax Act. The CIT-A also referred to a decision in the case of Prabhakar Keshav Kunde [2010 (8) TMI 926 - BOMBAY HIGH COURT] .Thus, considering that factually, the CITA on verification found that the land falls within the prohibited zone CRZ III category. - Decided against the revenue.
-
2020 (10) TMI 858 - ITAT BANGALORE
Wealth tax assessment - Validity of reopening of assessment - sustaining the addition made by the AO under Wealth Tax Act - HELD THAT:- AO has mentioned in the assessment order that he has duly recorded the reasons and the same was served upon the assessee. This observation of the AO, in the absence of any other contrary material, has to be considered as true. Before us also, the assessee did not furnish any material to disprove the observations made by the AO.
Accordingly, we agree with the view taken by Ld CIT(A) that the AO has followed correct procedure for reopening the assessment.
Addition of value of plot and the value of construction under progress - CIT(A) took the view that the value of building under construction is not exigible to Wealth tax - HELD THAT:- A careful reading of the provisions of sec.5(1)(vi) would show that it provides exemption of one house or part of a house or a plot of land. Hence exemption shall be available only for any one of the items mentioned in sec.5(1)(vi) of the Act, i.e., either for one house or for part of house or for a plot of land. If the assessee have already claimed exemption of one house, then, in our view, they cannot claim exemption for plot of land separately in addition to the house.
A proviso is not a separate or independent enactment as contended by Ld A.R, but it should be read along with the main provision as a whole, i.e., in construing an enactment containing a proviso, it is proper to construe the provisions together without making either of them redundant or otiose. A proviso must, therefore, be considered in relation to the principal matter to which it stands as a proviso. It cannot be considered as an independent provision foreign to principal provision itself.
We hold that the assessee cannot avail exemption for a plot of land, even if it is having an area of less than 500 sq. mts or less, if he had already claimed exemption of one house u/s 5(vi) of the Act. If the assessees have not claimed exemption of house, then they are entitled to claim exemption of either one house or part of a house or plot of land. We do not find merit in the contentions of the assessee and accordingly reject the same. - Decided against assessee.
-
2020 (10) TMI 313 - MADRAS HIGH COURT
Maintainability of appeal - limit fixed by the CBDT for the revenue to pursue the appeals - HELD THAT:- Substantial questions of law have to be answered against the revenue, in the light of the Circular issued by Central Board Direct Taxes [for brevity, 'CBDT'] bearing Circular No.5/2019 dated 05.02.2019.
Whether Tribunal erred in dismissing the appeals on the ground of law tax effect without taking note of the fact that the revenue audit objection is there in the assessee's case and therefore, the cases would come within the exemption culled out in the circular? - It is not clear what is the revenue audit objection in the instant matter. Nevertheless, we have heard the learned counsel for the parties on the merits of the matter. The issue pertains to valuation of a property in Neelankarai village. The assessee contended that the property falls within the high tide zone and in the terms of the coastal zone regulations, the property cannot be put to use for the purpose of constructing any building there on and even if an application is made to the local planning authority / local body, the same will be rejected, as the planning authorities have no jurisdiction to deal with any application for grant of planning permission on a land, which falls within CRZ limits.
No question of law arises for consideration in the instant cases and therefore, we are not inclined to entertain the appeals filed by the revenue. As mentioned above, the substantial question of law no.3 raised by the revenue is, stating that the Tribunal ought not to have rejected the revenue's appeal on the ground of low tax effect, without noting the revenue audit objection. Since we have decided in favour of the assessee on merits, substantial question of law no.3 does not arise for consideration.
-
2020 (9) TMI 430 - SUPREME COURT
Wealth Tax Liability - Whether Club can be treated as "Association of Person"? - ITAT said No - HC said Yes - What is the meaning of the expression “association of persons” which occurs in Section 21AA? - Whether Bangalore Club is an association of persons and not the creation, by a person who is otherwise assessable, of one among a large number of associations of persons without defining the shares of the members so as to escape tax liability? - HELD THAT:- For the first time from 1st April, 1981, an association of persons other than a company or cooperative society has been brought into the tax net so far as wealth tax is concerned with the rider that the individual shares of the members of such association in the income or assets or both on the date of its formation or at any time thereafter must be indeterminate or unknown. It is only then that the section gets attracted.
After 1st April, 2002, as income tax is concerned. It is well-settled that when Parliament used the expression “association of persons” in Section 21AA of the Wealth Tax Act, it must be presumed to know that this expression had been the subject matter of comment in a cognate allied legislation, namely, the Income Tax Act, as referring to persons banding together for a common purpose, being a business purpose in the context of a taxation statute in order to earn income or profits.
In order to be an association of persons attracting Section 21AA of the Wealth Tax Act, it is necessary that persons band together with some business or commercial object in view in order to make income or profits. The presumption gets strengthened by the language of Sec. 21AA (2), which speaks of a business or profession carried on by an association of persons which then gets discontinued or dissolved. The thrust of the provision therefore, is to rope in associations of persons whose common object is a business or professional object, namely, to earn income or profits. Bangalore Club being a social club whose objects have been referred to by the Appellate Tribunal in this case make it clear that persons who are banded together do not band together for any business purpose or commercial purpose in order to make income or profits.
Whether the club has been created to escape tax liability - Held that:- A perusal of the judgment in ELLIS BRIDGE GYMKHANA AND OTHERS [1997 (10) TMI 2 - SUPREME COURT] would show that Section 21AA has been introduced in order to prevent tax evasion. The reason why it was enacted was not to rope in association of persons per se as “one more taxable person” to whom the Act would apply. The object was to rope in certain assessees who have resorted to the creation of a large number of association of persons without specifically defining the shares of the members of such associations of persons so as to evade tax. In construing Section 21AA, it is important to have regard to this object.
The Bangalore Club is an association of persons and not the creation, by a person who is otherwise assessable, of one among a large number of associations of persons without defining the shares of the members so as to escape tax liability. - It is clear that Section 21AA of the Wealth Tax Act does not get attracted to the facts of the present case.
Charging provisions under the Income Tax versus under the Wealth Tax - Held that:- For all the reasons, we cannot accede to Shri Banerjee’s argument that being taxed as an association of persons under the Income Tax Act, the Bangalore Club must be regarded to be an ‘association of persons’ for the purpose of a tax evasion provision in the Wealth Tax Act as opposed to a charging provision in the Income Tax Act.
Effect of Dissolution / liquidation clause as per section 21AA(2) - Held that:- What has to be seen in the facts of the present case is the list of members on the date of liquidation as per Rule 35 cited hereinabove. Given that as on that particular date, there would be a fixed list of members belonging to the various classes mentioned in the rules, it is clear that, applying the ratio of Trustees of H.E.H. Nizam's Family [1977 (5) TMI 1 - SUPREME COURT] such list of members not being a fluctuating body, but a fixed body as on the date of liquidation would again make the members ‘determinate’ as a result of which, Sec. 21AA would have no application.
-
2020 (8) TMI 288 - ITAT AHMEDABAD
Validity of the assessment framed u/s 16(3) read with section 17 of WT Act - wealth tax officer was in possession of the information about the acquisition of 2 adjoining residential plots of urban land at Bopal which were subject to the wealth tax as per the provisions of section 2(ea) of the Act - assessee before us contended that the assessee has acquired membership in Bopal Shobhan Cooperative Housing Society Limited and not the lands as alleged by the authorities below - HELD THAT:- On perusal of the orders of the authorities below, we find that it was alleged that the assessee has acquired 2 adjoining piece of lands and there was no mentioned whether such pieces of land was acquired in Bopal Shobhan Cooperative Housing Society Limited. Accordingly a query was posted to the learned AR for the assessee to justify whether the land in dispute is the same which were acquired in the Bopal Shobhan Co-operative Housing Society Limited through the membership. But the learned AR failed to substantiate the same based on the documentary evidence.
Our apprehension is that there can be a possibility that the assessee has acquired other pieces of land other than the lands from such society. For this purpose, we have also perused the reason recorded for reopening the impugned assessment and found that there was also no reference made to the lands acquired from the society
Matter needs to be re-examined at the level of the wealth tax officer in the light of the above stated discussion and as per the provisions of law. Both the learned AR and the DR did not raise any objection on remitting the matter back to the file of the wealth tax officer. Accordingly, at this stage, we do not find any reason to adjudicate the issue raised by the assessee on merit. Hence, the ground of appeal of the assessee is allowed for statistical purposes.
-
2020 (5) TMI 315 - ITAT CHENNAI
Wealth tax assessment - valuation of land - Estimation as per the Wealth Tax Rules - assessee fairly submitted that the land in question is urban land therefore, it is liable for taxation under the Wealth Tax Act - HELD THAT:- Since assessee very fairly submitted that the land in question is urban land and liable for taxation, it may not be necessary for this Tribunal to go into the question whether this is an industrial land or not ? However, for the purpose of valuation as on the valuation date, the Wealth Tax Officer has to follow the procedure under the Wealth Tax Act after considering the locality of the land in question is situated, area of the land, potential for future development, infrastructure facilities available around the land etc. and other depressing factor such as the pendency of patta proceedings. This Tribunal is conscious of the fact that the patta is not a document of title.
Fact that the patta was granted initially and subsequently cancelled by the Tahsildar, definitely have an impact on the title of the property. Therefore, this is one of the relevant factor to be taken into consideration by the Wealth Tax Officer.
For the assessment year 2009- 10, the High Court has already fixed valuation, therefore it may not be necessary for the Wealth Tax Officer to re-examine the same. In other words, the valuation fixed by the High Court for the assessment year 2009-10 for registration of document has to be taken as value as on the valuation done by Wealth Tax Officer. For the assessment year 2013-14, the property was converted into stock-in-trade. This fact also needs to be taken into consideration by the Wealth Tax Officer. For other assessment years, the Wealth Tax Officer has to re-consider in the light of the observation made above. Accordingly, the orders of both the authorities below are set aside for the assessment years 2010-11 to 2013-14.
-
2020 (4) TMI 270 - ALLAHABAD HIGH COURT
Proceedings of Criminal Case under Sections 35(B) of Wealth Tax Act, 1957 - Non filing of return after long lapse of time - HELD THAT:- Section 276(C) deals with an offence of willful attempt to evade tax; Section 277 deals with false statement in verification etc., and Section 278B deals with offences by company.
Since Tribunal found that there was no concealment of income and order of penalty was quashed, prosecution u/s 276C would also automatically come to an end. Court held, when a criminal trial cannot proceed, it cannot be allowed to continue as that will amount to abuse of process of law.
Charge of conspiracy was not proved and various offences under the provisions of IPC were also not satisfied, hence, proceedings were liable to be set aside.
In the present case, firstly order of Tribunal relates to a different period of assessment. Secondly, it has not been found that Assessee was not liable to submit W.T. Return in the relevant A.Y. In my view, for the case in hand, applicant cannot take advantage of aforesaid judgement of Tribunal and it cannot be said that complaint filed in the case in hand would automatically cease after setting aside penalty imposed for the A.Ys. 1983-84 to 1988-89 since in the present case, A.Y. 1990-91 is involved.
-
2020 (3) TMI 1049 - ITAT HYDERABAD
Refund of the wealth tax paid by the assessee by virtue of the amendment to section 2(ea) of the WT Act - CIT (A) dismissed the appeals as not maintainable because the assessee itself has offered the net wealth to tax - Assessee submitted that since the amendment to section 2(ea) of the Act has been made with retrospective effect from 1.4.1993, the said land does not fall within the purview of the Wealth Tax Act and therefore, the assessee should be refunded the wealth tax paid by the assessee - HELD THAT:- In view of the CBDT Circular dated 11/06/2015, we remand the appeals to the file of the AO with a direction to reconsider the issue in accordance with the amended provisions of the Act. The assessee is also directed to approach the Pr. CIT u/s 25 of the Act and seek refund in accordance with the CBDT Circular and on such receipt of the application, the Pr. CIT shall dispose of the application within a period of one year from the end of the financial year in which the application is received and the AO thereafter shall refund the taxes paid by the assessee, if the Pr. CIT so directs.
Assessee’s appeals are treated as partly allowed for statistical purposes particularly because the CIT (A) orders are also dated 12.02.2014 i.e. prior to the CBDT Circular dated 11.06.2015.
-
2020 (3) TMI 1048 - ITAT HYDERABAD
Wealth tax assessment - urban land is held by the assessee attracts provisions of section 2(ea) of the Wealth Tax Act or not - HELD THAT:- As assessee has not produced any documentary evidence to establish that the lands are used for the agricultural purposes. The CIT(A), therefore, correctly confirmed the orders of AO in both the years under consideration that urban lands owned by the assessee are not at all used for agricultural purposes, therefore, the retrospective amendment made by the Finance Act, 2013 in Explanation 1 to section 2(ea) does not applicable to the case of the assessee. Accordingly, the AO completed the wealth tax assessment vide his order dated 30/12/2011 u/s 16(5) of the Wealth Tax Act, 1957 and made the addition correctly - Decided against assessee
-
2020 (3) TMI 1047 - ITAT HYDERABAD
Wealth tax assessment - assessee is a non-resident Indian residing in Jeddah, Saudi Arabia - assessee was owning assets exceeding the taxable limits - HELD THAT:- The assessee is having 5 properties, which according to the AO are taxable under the Wealth Tax Act and comes within the purview of section 2(ea) of the WT Act. We are of the view that the revenue authorities without appreciating the facts as well as the explanation offered by the assessee, passed the orders. In respect of properties mentioned at 4 & 5 of the table (supra), the assessee has filed unregistered stamp paper, it shows that he has gifted the properties to his son as well as to his nephew. However, the revenue authorities without taking into consideration the material evidence and explanation offered by the assessee, made the additions. Under these facts and circumstances of the case and to meet the ends of justice, we set aside the order of CIT(A) and remit the file back to the file of CIT(A) with a direction to adjudicate the issues in accordance with law and pass a detailed order after giving reasonable opportunity of hearing to the assessee. The assessee is directed to appear before the CIT(A) without fail and submit the necessary documentary evidence to substantiate his claim. We order accordingly - Appeal of the assessee is treated as allowed for statistical purposes.
-
2020 (3) TMI 582 - BOMBAY HIGH COURT
Wealth tax assessment - Valuation of the shares - HELD THAT:- The case of applicant's wife has held that Rule 1D of the Wealth Tax Rules, 1957, is prospective in nature and therefore, the same could not have been applied for undertaking valuation of the shares for the assessment years 1964-65, 1965-66 and 1966-67. However, the Tribunal, Pune Bench has held that Rule 1D of the Wealth Tax Rules could have been applied for the assessment years 1967-68 and 1968-69. On this basis, the Tribunal, Pune Bench, in fact, partly allowed the Appeals instituted by the applicant's wife, insofar as assessment years 1964-65, 1965-66 and 1966-67 are concerned, but, dismissed the Appeals for the assessment years 1967-68 and 1968-69.
Once, the Tribunal, Pune Bench ruled that Rule 1D of the said Act could have been invoked prospectively and such view of the Tribunal, Pune Tribunal was never challenged by the Revenue, the same view was required to be adopted in the case of the present applicants as well. In fact, the Tribunal has also taken a view that the Pune Bench view was required to be followed. However, while actually following such view, the Appellate Tribunal proceeded to dismiss all the Appeals instituted by the present applicants, instead of following the same course of action as was adopted by the Tribunal, Pune Bench.
Appeals instituted by the present applicants, insofar as assessment years 1964-65, 1965-66 and 1966-67 were required to be partly allowed by the Appellate Tribunal and only the Appeals concerning the assessment years 1967-68 and 1968-69 could have been dismissed.
Inclusion in the net wealth of the assessee the amount due to the assessee by certain parties in Portugal - HELD THAT:- As relying on M/S SHIV SHAKTI FLOUR MILLS (P) LTD. VERSUS COMMISSIONER OF INCOME TAX [2020 (3) TMI 182 - SUPREME COURT] Tribunal was not justified in law in confirming the inclusion in the net wealth of the assessee as amount due to the parties (the Lisbon fund).
-
2020 (3) TMI 581 - KARNATAKA HIGH COURT
Maintainability of appeal - monetary limit - low tax effect - HELD THAT:- Revenue contention that said Circular is prospective and cannot be made applicable to the pending matters, which we are not inclined to accept in the light of law laid down by Coordinate Bench of this Court in the case of COMMISSIONER OF INCOME TAX & ANOTHER V/S RANKA & RANKA [2011 (11) TMI 449 - KARNATAKA HIGH COURT] wherein it has been held that scope of Circular issued by Central Board of Direct Taxes would be applicable to the pending proceedings, which also came to be affirmed by Apex Court in the case DIRECTOR OF INCOME TAX V/S S.R.M.B DAIRY FARMING (P) LTD. [2017 (11) TMI 1494 - SUPREME COURT] . In fact, Central Board of Direct Taxes has also issued an instruction bearing No.F.No.279/MISC/M-93/2018-ITJ dated 20.08.2019 intimating all the Principal Chief Commissioners of Income Tax that Circular No.17/2019 would be applicable on all pending SLPs/appeals/cross objections/references. Hence, contention of learned counsel Sri.E.I.Sanmathi stands rejected.
Present appeal as already noticed herein above, being an off shoot of common order passed by ITAT, this appeal also deserves to be dismissed. Accordingly, appeal stands dismissed as not maintainable
-
2020 (3) TMI 580 - ITAT HYDERABAD
Net taxable wealth - Assessment of net taxable wealth on the immovable property - ½ share of flat at Khairatabad - HELD THAT:- It is not in disputed that the house was not under repair. In these circumstances, it cannot be presumed that the house is habitable. In such situation, it cannot be treated as a residential property in the true sense. Further, the Ld. WTO has adopted the market value on estimate basis without any supporting evidence which is not justifiable. Considering the above facts of the issue, we are of the considered view that the aforesaid residential house cannot be treated as an asset exigible for wealth tax. However, only the undivided share in the land attributable to the residential flat shall be exigible for wealth tax which the Ld. WTO shall estimate after obtaining the value from the Stamp Valuation Authority of the State Government and by considering all the relevant factors and thereafter arrive at the taxable wealth. It is ordered accordingly.
¼ share of land at Jubilee Hills - We are of the considered view that the ad-hoc estimate of the market value of the immovable asset is not justifiable. Further, the unfinished building cannot be treated as a building exigible to wealth tax. However, the urban land is exigible to wealth tax as per section 2(ea)(v) of the Act. Accordingly, the Ld. WTO is hereby directed to obtain the market value of the land from the Stamp Valuation Authority of the state Government for the relevant assessment year and after considering all the relevant factors estimate and adopt the same for computing the taxable wealth of the assessee.
Land at Kapra - Assessee had intimated to the Ld. WTO that the land purchased along with others were for the purpose of the business viz., construction of flats which are to be subsequently sold and therefore it should be treated as stock in trade. Further the assessee had also conducted in such a manner so as to establish that the land was purchased for the purpose of business by obtaining permission for construction from GHMC. In such situation, merely because the permission for granting construction from GHMC was applied on 25/7/2009 it is not appropriate to treat the “urban land” as “asset” U/s. 2(ea)(i)(v) of the Act because the moment the land is purchased for trading it has to be treated as stock-in-trade and section 2(ea)(i)(2) vividly exempts stock in trade within the purview of “assets” for the purpose of computing taxable wealth. Hence, we do not subscribe to the view of the Ld.WTO. Accordingly, we hereby direct the Ld. WTO to exclude the land at Kapra for the purpose of determining the taxable wealth of the assessee.
Land at Katedan - Assessee should be provided with one more opportunity to justify his claim with cogent evident before the Ld. WTO. Accordingly, we hereby remit back the matter to the file of Ld. WTO for de novo consideration on the issue.
Land at L.B. Naga - We are of the considered view that the assessee should be provided with one more opportunity to justify his claim with cogent evident before the Ld. WTO on this issue also. Accordingly, we hereby remit back this issue to the file of Ld. WTO for de novo consideration.
Motor Car - On perusing the issue, we are of the view that the Ld. WTO has rightly assed the motor car to wealth tax because neither the assessee is in the business of running motor car nor hiring them. Further the motor car is not held by the assessee as stock in trade. Therefore, we do not find any infirmity in the order of the Ld. WTO on this issue.
........
|
