TMI Blog2015 (12) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... poses. Accordingly, we hold that the assessee is eligible for exemption for urban land from wealth tax for Asst Years 2003-04 & 2004-05. It is well settled that the assets held as on the valuation date (i.e 31st march of each year) is the relevant date for bringing an asset under the ambit of wealth tax. Similarly the exemption provision also needs to be looked into as per the prevailing law on the valuation date. Since the land was purchased on 12.3.2003 , it will continue to claim exemption upto 12.3.2005 but not thereafter and accordingly comes under the ambit of taxable wealth as on 31.3.2005 being the valuation date. Hence the assessee is not eligible for exemption from wealth tax under this category for Asst Year 2005-06. - Decided against Assessee. - W.T.A Nos. 06 to 08/Kol/2014 - - - Dated:- 18-11-2015 - Shri M. Balaganesh, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant: Shri S.M Surana, Advocate, ld. AR For the Respondent : Shri Niloy Baran Som, JCIT, ld. Sr. DR ORDER Shri M. Balaganesh, AM These appeals of the assesee arise out of the common order of the Learned CWT(A)-II, Kolkata in Appeal Nos. 115,116 117 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land is not remaining as such in view of the fact that the construction process had already started thereon , which is not disputed, hence the same would be outside the ambit of taxable assets u/s 2(ea) of the Act. This was not appreciated by the Learned AO and hence the value of the said urban land was brought to tax by the Learned AO as follows:- Asst Year 2003-04 - 15,97,148 Asst Year 2004-05 - 17,06,198 Asst Year 2005-06 - 17,52,998 On first appeal, it was submitted by the assessee that the urban land is held for business purpose at Canal Circular Road, Kolkata for setting up of a hotel and where construction of a building for business purposes is under process. It was submitted that the assessee planned to erect a residential guest house for the purpose of lodging travelers on the land and also provide food for the said travellers. It was also submitted that the said land was used for industrial purposes and admittedly hotel is an industry and hence on that count itself, it is eligible for exemption from wealth tax for two years from the date of acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence the land is meant for industrial purposes and accordingly exempt for first two years from the date of acquisition i.e for Asst Years 2003-04 and 2004-05. The second alternative argument advanced by the Learned AR is that the urban land is not identifiable as an urban land as on the valuation date as the construction activity had admittedly been started on the said land and hence is eligible for exemption from wealth tax. He placed reliance on the decision of Hon ble Punjab Haryana High Court in the case of CWT vs Smt.Neena Jain reported in (2010) 189 Taxman 308 (P H) in support of his proposition. 6. In response to this, the Learned DR stated that the arguments of the Learned AR that the exemption for plot of land not exceeding 500 sq.metres cannot be made applicable to the company as the said exemption is available only for individuals and HUF. He placed reliance on the Explanatory Memorandum to section 5(vi) of the Act Exemption for house / plot explaining the scope of the said provision. He further argued that the land in which construction is in process is meant to be used as a guest house and exemption is not eligible to the assessee even for first two years. He f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t having a plot exceeding 500 sq.mtrs in size treated by the provision as over-sized be eligible for proportionate value of asset limited to the permissible size of the plot ? An answer in the affirmative would be fair, but the exemption for the plot is governed by the proviso limiting only to a plot of size of 500 sq.mtrs or less, so that a plot of even a slightly larger size, may not qualify for exemption. The aforesaid Explanatory Memorandum clearly specifies the intention of the legislature that the exemption for plot of land not exceeding 500 sq.mtrs has to be limited only to individuals and HUF and the proviso to section 5(vi) had only acted as a restrictive covenant and full effect needs to be given for the same. We also hold that the proviso needs to be read along with the main section and it cannot act as an alien to the main sub-section. Proviso in section 5(vi) is a qualifying provision to grant exemption for plot of land not exceeding 500 sq.mtrs and limiting it only to individuals and HUF and hence the argument of the Learned AR that exemption is also applicable for companies is not appreciated. The alternative argument of the Learned AR is that the land held f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on the decision of the Jurisdictional High Court in the case of CWT vs Sanjay Krishna Hedge reported in (2013) 35 taxmann.com 173 (Calcutta) which in turn relied on the decision of Hon ble Karnataka High Court in the case of CWT vs Giridhar G Yadalam reported in (2007) 163 Taxman 372 (Kar) wherein it was held that:- 9. In fact, we have been provided with the order of the Tribunal passed on an earlier occasion, on which reliance is placed by the Tribunal. We have also gone though the order in WTA No. 4/2003. A reading of the said order would show that the Tribunal seems to have not properly considered the word `constructed' in the said order. The Tribunal seems to have been swayed away by the theory of openness of the land for the purpose of taxation. The Tribunal has failed to notice the principle that each word in taxing statute has it own significance for the purpose of taxation. The word, land on which the building is constructed has not been properly appreciated considered by the Tribunal. The said order cannot be a bar for the department to seek tax in respect of the land on which building is constructed in terms of the defence . We find that the Hon ble Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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