TMI Blog2011 (6) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee requested the AO to supply copy of reasons recorded for re-opening of the assessment. However, no copy of reasons was supplied to the assessee. Against request was made. However, no reasons were given at the end of the AO. It was submitted before ld. CWT (A) that assessee was not given any copy of reasons recorded and, therefore, assessment completed is not valid. Reliance was placed on various case laws. Detailed written submissions were filed. After considering the submissions, the ld. CWT (A) has held that non-supplying of copy of reasons is a procedural lapse. Therefore, assessment completed by the AO was held as valid. Accordingly, re-opening of the case, reason to believe and reason to suspect etc. were treated as academic in nature and thereafter the ld. CWT (A) proceeded to decide the appeals on merit. These findings of ld. CWT (A) are final as assessee has not filed any appeal against these findings. 3. The assessee runs an oil mill known as Rani Oil Mills, Alwar situated on old station Road. This Rani Oil Mills was established in the year 1883. A hydraulic steam Cotton Press was established by Seth Harmukh Rai Govind Ram of Khurja. Thereafter, in the year 1894 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 93. The Collector vide his order dated 23.8.93 determined the market value of the commercial establishment by holding the land as industrial one and the value of land was arrived on the basis of 1/4th to 3/4th as of lessor and lessee proportionately. The value was arrived at ₹ 228/- per sq. yard. And the value of lessor was assessed as 1/4th i.e. ₹ 72/- per sq. yard and ₹ 156/- per sq. yard of the lessee. This judgment was passed after going through case law which has been mentioned in the judgment. This is a judgment of competent authority under the Stamp Act Rajasthan and is also binding for treating the valuation and market evidence. The assessee submitted the report of valuer Shri P. R. Agarwal and the valuer has assessed the value of commercial establishment of assessee s share as ₹ 10,57,428/- for the reason given therein. 5. During the re-assessment proceedings, it was submitted before the AO that the land in question being industrial land and, therefore, exempt from the purview of Wealth Tax Act, 1957 being a commercial establishment. The AO was not satisfied with the contention of the assessee, and, therefore, he held that these are not industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the purview of the Urban Land, therefore the same is not liable for taxation under the W.T. Act. It was further explained that the property known as Raniwala Oil Mills is a commercial establishment/complexes and as such is not covered within section 2(ea)(i)(5) of the W.T. Act. 6. It was further submitted that asset is an industrial undertaking, hence exempt under section 5(1)(xxxi). Reliance was placed on the decision of Hon ble Allahabad High Court in case of CWT vs. Jetha Nand, 192 ITR 650 (All.). The summarized submissions were also filed before ld. CIT (A) which are reproduced at page 7 of ld. CIT (A) as under :- (i) That it is not a land but construction in the form of Building etc. are standing since 1883 and thereafter. (ii)That the learned Asstt. Commissioner of Wealth Tax has committed a grave error on facts and in law in treating the said property as urban land. The Assessing Officer has not considered the factum of construction on the land. (iii)That there is a dispute with regard to the title of the property as such the said asset is not the asset with in the meaning of the Wealth Tax Act, 1957. (iv) That the permission to construct has been decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was running over it. The industrial unit was running with the permission of the then competent authority. The appellant applied for the construction over the said asset to the UIT, and it was refused twice, necessary evidence in support thereof was submitted before me. The Assessing Officer has proceeded to value the land on the basis of para 4 of the lease deed, whereby the lessee shall be entitled to use the property for construction of hotel, cinema, manufacturing industry, shops or for any other purposes and in other manner as they like. This para refer to the possible future use of the property and on the basis of future use, the asset can not be valued for the wealth tax purposes. While arriving at this conclusion I draw strength from the finding given in the CWT v/s DCM Limited 290 ITR 615 (Del.), wherein it has been given the finding that we have no doubt in our mind that in order to decide taxability of an asset, we have to go by the factual position as on the valuation date. It is not permitted under law to assume a hypothetical situation which never existed. Further, the terms/provisions contained in the lease deed, which have been relied upon by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the revenue records. Therefore, these depressing factors ought to have been taken into account while valuing the land as held in Ramaiya Reddy v/s. Deputy CIT (2005) 2 SOT, page 59 (Bangalore). Therefore, considering all these issues and in order to meet the ends of justice, it is directed to value the said industrial land at rate of ₹ 216/- per sq. yds. Now coming on the issue of taxability of the asset within the meaning of Wealth-Tax Act, 1957, the claim of the appellant deserves to succeed not only on one count but on several counts. First and foremost among them, that the UIT, which is the governing body for granting the approval for construction, in the instant case, has refused to grant the approval not only once but twice vide their refusal letter dated 25.07.1995 and 10.05.2005, and by virtue of exclusion clause of explanation 1 (b) attached to section 2(ea), the land in question goes out of the definition of the urban land. A reference in this regard is made to the finding given by Honourable Delhi High Court in the case of CWT v/s DCM Limited 290 ITR 615, wherein it is stated that the intention of the legislature appears to be that land which falls within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounded by residential houses and, therefore, the same is assessable under the W.T. Act. 12. On the other hand, the ld. Counsel of the assessee placed reliance on the order of ld. CIT (A). Attention of the Bench was drawn on various case laws, copies of which are placed on record. 13. After considering the orders of the AO and ld. CIT (A), we find no infirmity in the finding of ld. CIT (A), neither finding of the ld. CIT (A) could be controverted by ld. D/R nor any other material were brought on record to establish otherwise. The ld. D/R has placed reliance on the order of the AO and it was further stated that land in question is surrounded by residential houses and other establishments. Therefore, the same are liable for tax under the W.T. Act. Merely surrounding by the residential houses and other complexes does not change the character of a particular land. Land in question is not a piece of land only as the same is industrial establishment which was established about 120 years ago. The property has been changed under various hands. The necessary licences etc. have been issued establishing the property as industrial establishment. The ld. CIT (A) has considered the aspect m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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