Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Shri G. Anand Hyderabad and others Versus Wealth Tax Officer Ward 6 (2) Hyderabad and others

2015 (8) TMI 47 - ITAT HYDERABAD

Wealth tax - Claim of exemption - Urban land - Revenue Authorities assessed the value of the land as on valuation date - AO held the assessee to be liable to penalty u/s 18(1)(c) as the assessee was entitled under the ULCA to make an application for regularisation of the land and that the assessee had on the one hand, not even made such an application and on the other, claimed exemption from wealth tax on this ground - Held that:- Out of the total land of 1790 sq.meters, there is no dispute with .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ration. It is also a fact that the assessee is not certain about which portion of the land being 790sq.meters declared excess would be demarcated and acquired by the Govt. Therefore, there is uncertainty not only with reference to the right of construction but also which portion of the land would be allotted to the assessee.

In view of this uncertainty, we cannot value the property as per the Sub Registrar valuation adopted by the AO holding that the assessee has complete rights over .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rther exemption was granted only on 7.4.2008, we are of the opinion that the Revenue Authorities wrongly assessed the value of the land as on valuation date at ₹ 7.49 crores, we direct the AO to exclude this amount - Decided in favour of assessee. - WTA No.1/Hyd/2014,WTA No.2/Hyd/2014 - Dated:- 29-7-2015 - Shri B. Ramakotaiah & Smt.Asha Vijayaraghavan, JJ. For the Petitioner : Shri A. Srinivas For the Respondent : Shri B.V. Gopinath ORDER Per Smt. Asha Vijayaraghavan, J.M. These are th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee to file return of net wealth. Assessee filed return of net wealth in form BA declaring net wealth of ₹ 14.00 lakhs. In the said return of wealth, assessee at Column Exempted Asset also mentioned that he owns urban land admeasuring 2140 sq. Yards (1790 sq.meters). Assessee also mentioned that he was claiming exemption as construction was not permissible under the Municipal Corporation Law as there was no Urban Land Ceiling Act (ULCA) Certificate. 3. AO obtained information from the SRO a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

establish this claim, that as per the order, the final statement u/s 9 of the ULCA had not been prepared, that the land had not been registered in favour of the govt, that the assessee was entitled under the ULCA to make an application for regularisation of the land and that the assessee had on the one hand, not even made such an application and on the other, claimed exemption from wealth tax on this ground. AO, therefore, held the assessee to be liable to penalty u/s 18(1)(c) and imposed a pena .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d notification under the ceiling act, the land is deemed to have been acquired by the govt.and the assessee had only a right to receive compensation. The AR also relied on the decision in the case of Calcutta Electric Supply Corporation vs. CWT (1971) 82 ITR 154 (S.C). 5. The AR also submitted that without prejudice to the plea that the land was exempt from wealth tax, the valuation could not be taken at market value, but the value which the assessee would get as compensation under the ULCA. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and in excess to the ceiling limit is required to file statement declaring properties held by him. On its basis, a draft statement is prepared u/s 8 of the ULCA to enable him to file objections, if any which are required to be disposed by a speaking order.. The CIT (A) further explained that a final statement is then prepared u/s 9 of the ULCA with amendments on the basis of the objections and the decisions thereon and this is followed by acquisition of the excess vacant land by the State Govt. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ITR 226 (Kar.), wherein the Hon'ble Court has held as under: "Section 7(1) of the Wealth-tax Act, 1957 does not contemplate any actual sale or actual state of market. It is to be assumed that there is an open market and the property can be sold in such a market on the valuation date. This fair market value is to be determined as would be available if the property is sold by a notional willing seller to a notional willing buyer on the valuation date itself. If sale of the land or the pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n under section 10(1) nor under section 10(3). It was for the Wealth-tax Officer to find out what price the assets would fetch if they were sold in the open market as on the valuation date by keeping in view certain restrictions in the Urban Land Ceiling Act, which would have a depressing effect on the value of the asset. Even in a case where there is a prohibition under the Act for the sale of such asset, since it is not yet deemed to have become the property of the Government, the valuation ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

has rightly proceeded to value the SRO rate which is reasonable and acceptable method of valuation. The CIT (A) pointed out that the adoption of compensation under ULCA as the value of the land has been ruled out by the Court in the decision cited namely, CWT. Vs. Sri Srikantadatta Wadiyar (2005) 279 ITR 226 (Kar.). The CIT (A) was of the opinion that until such time the order u/s 10 of the ULCA is passed, the adoption of the compensation under the ULCA as the value of the land cannot be taken. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rected to be deleted . 10. The assessee is in appeal before us against the order of the CIT (A) confirming the addition of ₹ 7,49,00,000 being market value of the Plot as per the Sub Registrar Office. 11. The Department is in appeal against the deletion of the penalty imposed u/s 18(1)(c). 12. The ld Counsel for the assessee submitted that as the land was subject to urban land proceedings, there is a restricted right on the said land. Because of the restricted right, no construction is per .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said explanation it has been categorically stated that where construction of a building is not permissible in any law for the time being in force in the area in which land is situated, then the same does not come under the definition of asset for wealth tax purpose. 14. It was submitted by the ld Counsel that though the Appellant is in physical possession, as long as urban ceiling acquisition proceedings are in process the Appellant has got no right what so ever either to alienate the land or e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s land. However the said exemption was granted on 7/4/2008. It is also submitted that wealth tax is levied on the wealth as on the last day of the financial year. The ld Counsel relied on the decision of Hon'ble Supreme Court in the case of "Calcutta Electric Supply Corporation" reported at 82 ITR 154 wherein it was held that subsequent events regularizing the title or other such events cannot be taken into consideration in determining the value of the wealth. 16. The ld Counsel fu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n takes place on that date. 18. Without prejudice to the above submissions it is submitted that where proceedings under Urban Ceiling Act have been initiated, the value of the land gets restricted, and valuation is to ascertained taking the restrictions and prohibitions contained in the Ceiling Act as if land is notified as excess land. In such cases the valuation is to be taken not at the market value but at the value which the assessee would get as a right of compensation under the ceiling act .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

heard both the parties and carefully perused the material on record. Out of the total land of 1790 sq.meters, there is no dispute with reference to the fact that the land is subjected to proceedings under the ULCA. There is also no dispute that the ULCA Authorities have declared 790 sq. meters as excess land. Even though the ld CIT (A) has stated that final statement u/s 9 of ULCA had not been prepared, it was the contention that the assessee has preferred to make an application u/s 20 for exem .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version