Home Case Index All Cases Wealth-tax Wealth-tax + AT Wealth-tax - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 1109 - AT - Wealth-taxWealth tax assessment - ownership of the impugned urban land - whether the assessee has transferred ownership of the impugned urban land to CIDL? - crux of the argument of the AR is that, as on the valuation date, the impugned urban land did not 'belong to' the assessee in view of the master development agreement - HELD THAT:- It is a fact that CIDL, the developer, did not develop the property except for constructing boundary walls along the property. (Even the construction of boundary is disputed, since the ‘cost of improvement’ for same was disallowed by the AO while computing LTCG when the same property was sold in AY 2008-09) This eventually led to the 'Settlement Agreement' between the parties whereby the master development agreement was terminated. In view of the above, there can be no doubt in holding that the requirements of section 53A of the Transfer of Property Act, 1882 have not been fulfilled. It is pertinent to mention that mere inclusion of the expression in the development agreement that the possession transferred shall be deemed to be in part performance of an agreement to sell for the purposes of section 53A of the Transfer of Property Act 1882, does not hold any significance. It is the conduct of the parties that determine the satisfaction or otherwise of the requirements of section 53A of the Transfer of Property Act 1882. Therefore, we are of the view that there is no transfer of ownership of the impugned urban land under the master development agreement. Effect of 'No objection certificate' issued under Chapter XX-C of the IT Act - Revenue right from the start of the controversy surrounding development agreements was always of the view that when the possession of land was handed over to the developer for development purposes, the transfer was effected. Legislature through the Memorandum to Finance Bill 2017, in the context of insertion of n/s 45(5A) to the Income-tax Act, 1961, clarified that the year in which the completion certificate has been issued by the competent authority shall be the year of transfer. In view of the conclusion drawn in Seshasayee's case (2019 (12) TMI 702 - SUPREME COURT] which was post insertion of section 45(5A), that the provisions of section 2(47)(v) would not be applicable if the development agreement merely grants a license to the developer to develop and sell the superstructure. Therefore, the 'no objection certificate' does not in our view hold significance. Chargeability of wealth tax - Land occupied by any building which has been constructed - In the present case, it is undisputed that only boundary walls have been constructed along the property. It is not brought on record as to whether there exists an approval of the appropriate authority for constructing any building on the land. Irrespective of such fact, the impugned urban land would not fall within the above clause for the following reason. The Hon’ble Karnataka High Court in Commissioner of Wealth Tax vs. Giridhar G Yadalam [2007 (3) TMI 334 - KARNATAKA HIGH COURT] has interpreted the said expression to mean a land on which complete building stands. It was held that a building in the process of construction cannot be construed as a "building which has been constructed' as affirmed by Giridhar G Yadalam v Commissioner of Wealth Tax [2016 (1) TMI 826 - SUPREME COURT] - Therefore, in the absence of any building on the impugned urban land, this clause will not apply to the present case. Land held by the assessee as stock-in-trade - The assessee has not demonstrated that the lands were held as stock-in-trade. It is also pertinent to note that the assessee cannot take conflicting stands before the court -Therefore, on totality of facts of the case, this clause will not apply to the present case. In view of the aforesaid reasoning we hold that the assessees are liable for wealth tax for the respective assessment years. Decided against assessee.
|