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2012 (7) TMI 634 - AT - Wealth-taxLiability to Wealth tax on land as an “asset” within the meaning of section 2(ea) of the Wealth tax Act,1957 - assessee contested that the land along with the superstructure can be considered as “residential house” and therefore can be considered to be an exempted asset u/s. 5(vi) - that the assessee had purchased land measuring 3059.50 sq. mts. from five different parties and consolidated into one single final plot for commencing construction of residential house - Held that:- On reading the provisions of Sec. 5(1)(vi), it becomes evident that exemption from wealth tax u/s. 5(1)(vi) is available in respect of one house or part of a house belonging to an individual or and Hindu Undivided Family. Exemption from wealth tax is also available to a plot of land comprising an area of 500 sq. mts or less as it is not considered as an “asset” within the meaning of section 2(ea). In the present case, the assessee is not entitled to exemption u/s. 5(1)(vi) of the Wealth Tax Act,1957, for the reasons that the house is not habitable in view of the fact that plastering, flooring, drainage and electricity is not done, doors and windows are not installed, the ceilings are in damaged condition. Even the English translated copy of the sales deed which has been signed by both, the sellers and the buyer, states that to use the house for residence, entire fresh construction will have to be put up. Thus present condition of the house in which it exists cannot be considered to be a habitable house. Since in the present case, the area of land is 3059.50 mts. which is in excess of the prescribed limit of 500 sq. mts and the house is incomplete, the assessee will not be entitled to deduction on the incomplete construction and accordingly the assessee would be liable to wealth tax on value of plot exceeding 500 sq.mts along with the cost of incomplete construction. The A.O. is directed to recompute the net wealth of the assessee accordingly. Thus this ground of the assessee is partly allowed. Challenge the authority of the A.O. to value the taxable asset - Held that:- That the assessee has not filed valuation report along with the return nor was it made available to the WTO during the course of assessment. In such a situation the W.T.O. was left with no other option but to estimate the net wealth based on the material on record, thus the estimate made by the WTO is reasonable - against assessee.
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