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2019 (8) TMI 1093 - AT - Wealth-taxWealth tax escapement - Notice issue u/s 17 of Wealth Tax Act - whether the impugned land is not liable for wealth-tax assessment - urban land as per Explanation 1 to section 2(ea) of the Wealth-tax Act, 1957 - HELD THAT:- Wealth is leviable only on unproductive asset and not on commercial asset. This is clear from the provisions of Wealth-tax Act, 1957. The Parliament has in its wisdom foreseen that for commencement of an industrial project, it would take minimum two years for securing permission and approval and hence, such land which is held as per the objects of the company for industrial purposes has to be exempted from the levy of wealth-tax for a period of two years from the date of its acquisition. The word “used” in the statute is land held for industrial purpose during the initial two years period. There is no requirement that such land should be actually used for industrial purpose during the said period of initial two years. When a company with certain stated objects in its memorandum acquires land to implement the object, undoubtedly, the value of such land has to be excluded from the taxable wealth during the initial two years period. On facts on record, it is clear that the land was held by the assessee for industrial purpose for setting up information technology park which includes conveniences and facilities of a specialized nature for information technology industry. The CWT(A), therefore, was correct in excluding value of the impugned land from the taxable wealth. The finding of the Wealth Tax Officer that the assessee has no intention to undertake setting up of technopark is not based on any tangible material. As mentioned earlier, the main object of the assessee-company for which it was incorporated was to establish technopark and facilities which provided for IT industries. The assessee had made attempt to undertake land filling / leveling. The efforts were stopped as per the stay order dated 23.09.2006 from the District Collector. There have been various correspondences between the assessee and the authorities concerned for lifting the stay granted for land filling / leveling. The observation of the WTO that the assessee had no intention to construct any techopark is without any basis. Even otherwise, when the stated object of the assessee-company in the memorandum of association is to establish techno park, for the initial two years from the date of acquisition of land, the impugned land cannot be brought to tax under the Wealth-tax Act, 1957, irrespective of the fact that the land was not actually used for the industrial purpose during the said period. In the instant case, for assessment years 2007-2008 and 2008-2009, the period of two years has not expired from the date of acquisition of land. Therefore, we are of the view that the same cannot be brought within the definition of urban land as per Explanation 1 to section 2(ea) of the Wealth-tax Act, 1957. - Decided against revenue
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