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2016 (4) TMI 731 - AT - Wealth-taxEnhancement of value of land - Held that:- The land earlier was held by the assessee as non-productive capital asset which was subjected to the wealth tax. However, the assessee had converted 29000 sq. yds. of the land into stock in trade on 31.05.06 and therefore for the relevant assessment year 2007-08, the 29000 sq. yds of the land no longer remain a non-productive capital asset but a business asset in the shape of stock in trade capable of yielding taxable business income and thus exempt from wealth tax. In the wording in relation provided under the exclusion clause, “ any land held by assessee as stock in trade for a period of 10 years from the date of its acquisition”, the term "date of acquisition" in such circumstances would mean the date of acquisition of asset as stock in trade which will be the date of conversion of a non-productive capital asset into stock in trade. The time limit of 10 years, in our view, has been provided to curb the practice of misuse of the provision by showing the asset as stock in trade but in actual keeping the same as non-productive and thereby wrongfully getting the exemption from wealth tax from year to year for a long period of more than 10 years. The time limit thus for claiming exemption from wealth tax in case of any land held as stock in trade has been restricted up to 10 years. Once the non-productive asset like urban land is converted to a productive asset like a building which qualifies for exemption, then the assessee can start availing of exemption even during the period of conversion of such non-productive asset to productive asset. See Apollo Tyres Ltd. vs. Assistant Commissioner of Income-tax [2009 (12) TMI 572 - Kerala High Court] The Ld. D.R. has also fairly agreed that so far as the 29000 sq. yds of land which was converted to stock in trade in the financial year 2006-07, the same was not eligible for imposition of wealth tax.
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