TMI Blog2016 (4) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... , which admittedly, is a public purpose under the provisions of LAC Act, but the land vests with the Government and it has every right to take a decision with regard to the said land in order to liquidate the financial crunch of its company i.e. the assessee before us, which is a Government company. However, the said decision of the Government was withdrawn on a later date and funds were decided to be infused into the assessee company. Once the asset does not belong to the assessee, we find no merit in the orders of authorities below in assessing the value of the said assets in the hands of assessee and accordingly, we direct the Assessing Officer to delete the same - Decided in favour of assessee - WTA Nos. 02 to 07/PN/2013 - - - Dated:- 29-2-2016 - Ms. Sushma Chowla, JM And Shri Pradip Kumar Kedia, AM For the Appellant : Shri Ashok N. Kothary For the Respondent : Shri Hitendra Ninawe ORDER Per Sushma Chowla, JM This bunch of six appeals filed by the same assessee are against separate orders of CWT(A)-V, Pune, all dated 31.05.2013 relating to assessment years 2004-05 to 2009-10 against respective orders passed under section 16(3) r.w.s. 17 of the Wealth T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the issue, reference is being made to issue in WTA No.02/PN/2013 . 6. Briefly, in the facts of the present case, during the scrutiny assessment proceedings under section 143(3) for assessment year 2004-05, the Assessing Officer noted that the assessee had shown huge unused urban land, as an asset in the Balance Sheet, which as per the Assessing Officer was chargeable to Wealth Tax , but the assessee had not furnished any Wealth Tax Return for the said assessment year 2004-05. Thereby, the Assessing Officer was of the view that the wealth had escaped assessment. Accordingly, notice under section 17(1) of the Act was issued on 30.03.2011. In response to the said notice, the assessee furnished the return of wealth declaring total wealth of ₹ 4,21,800/-. During the course of wealth tax assessment proceedings, the Assessing Officer noted that the assessee had declared total wealth to be on account of movable property valued at ₹ 4,21,800/-. The assessee had not declared any immovable property as its wealth during the year, but had claimed the same as exempt. The contention of the assessee before the Assessing Officer was that the said asset was urban land and since 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004-05 211.67 crores 7. The Assessing Officer thus, added the value of land at ₹ 211.67 crores to the net taxable wealth of the assessee and completed the wealth tax assessment. 8. Before the Commissioner of Wealth Tax (Appeals) [in short CWT(A) ], the contention of the assessee was that the Special Land Acquisition Officer, Pune vide order dated 27.03.1967 had passed the land acquisition award under section 11 of the LAC Act and the lands were acquired for the expansion of present residential colony of HAL, which was a Government Undertaking. The said land was acquired by LAC Officer free of cost as Grant, which was exclusively for residential colony purpose only and that too only for HAL and no other usage or diversion was allowed. The assessee further claimed that the lands granted were subject to several conditions as to its usage and disposal and no sale or disposal for commercial purpose was allowed. However, 69.33 acres of land acquired for colony expansion remained unused for construction and was used for welfare activities of the colony. Thereafter, submission s were made that the assessee since was running into huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ony of the company and was not the wealth of the assessee. The learned Authorized Representative for the assessee pointed out that initially 200 acres of land was acquired by the assessee, which was a Government company and residential colony for its employees was constructed. In 1965 additional land of about 69 acres were acquired by the Government of India for use of the assessee company, against which in 1967 award money was paid by the Government of India. The learned Authorized Representative for the assessee further pointed out that in 1997 since the assessee company became sick, BIFR proceedings were started and because of huge losses, Government of India decided to sell about 20 acres out of 69 acres, but nothing could be sold by the Government of India. The learned Authorized Representative for the assessee stressed that throughout the assessment proceedings and appellate proceedings, the presumption was that the land belonged to the assessee. Reference was made to clause (f) (iv) of section 3 of the LAC Act to point out that the acquisition was for public purposes or for the purpose of Government company and under section 16 of the Act after acquisition of such land, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land was never transferred to the assessee and only possession was handed over to the assessee company for the construction of residential colony. The learned Authorized Representative for the assessee further placed reliance on the ratio laid down by the Hon ble Supreme Court in V. Chandrasekaran Anr. Vs. The Ad ministrative Officer Ors. reported in (2012) 10 S.C.R. 603, wherein the legal connotation of nature of land acquired by the Government of India has been explained elaborately. While summarizing its submissions, the learned Authorized Representative for the assessee stated that the company was a Public Sector Undertaking and under clause (f) of section 3 of the LAC Act, public purpose also includes clause (iv) i.e. provision of land for a corporation owned or controlled by the State. However, under section 16 of the LAC Act, the land belongs to the Government and not to the assessee, so, it could not be said that the land is belonging to the assessee for inclusion under the Wealth Tax Act. With reference to additional grounds of appeal No.1 and 2, the learned Authorized Representative for the assessee summarized that since the land does not belong to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same was passed on perusal of Possession Note. Admittedly, vide the said document issued on 22.02.2002 by the Revenue authorities, the possession of the land for occupation by HAL i.e. the assessee before us, for the construction of residential colony of its employees, was handed over to the assessee. 13. In order to understand the acquisition proceedings, reference is to be made to the provisions of Land Acquisition Act, 1894, under which the said land was acquired by the assessee. The LAC Act prescribes the said Act to amend the law for acquisition of land needed for public purposes and for Government companies and for determining the amount of compensation to be made on account of such acquisition, the Act was enacted. Under section 3(f) of LAC Act, expression public purpose has been defined and the relevant clause for deciding the present issue is clause (4), under which it is provided that the provisions of land for Corporation owned or controlled by the State would be included under the expression public purpose . The claim of the assessee before us was that the Government of India started the acquisition proceedings in order to acquire land for the benefit of company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Collector after receiving the approval of appropriate Government or by any such officer as authorized by the Government. Thereafter, under section 16 of the LAC Act, when the Collector has a made an award under section 11, then, he may take possession of the land, which shall thereupon vests absolutely in the Government, free from all encumbrances. Reading the above said provisions of the Land Acquisition Act, we find that the procedure for acquisition of land required for public purpose by the Government is governed by the aforesaid provisions and after the said procedure is so complied with and the award has been finalized by the Collector for acquiring any piece of land, against which the compensation is paid to the rightful owners of the land or the persons who are interested in the land, then once, the land is available for acquisition by the Government, the Collector is to take the possession of the land, which thereupon vests in the Government absolutely free from all encumbrances. 14. The Hon ble Supreme Court while deciding the issue under the Land Acquisition Act for acquisition of certain piece of land in V. Chandrasekaran Anr. Vs. The Administrative Officer O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be used for any other purpose. In case there is no other public purpose for which the land is needed, then instead of disposal by way of sale to the erstwhile owner, the land should be put to public auction and the amount fetched in the public auction can be better utilized for the public purpose envisaged in the Directive Principles of the Constitution. (See also: C. Padma Ors. V. Deputy Secretary to the Government of Tamil Nadu Ors., (1997) 2 SCC 627; Bhagat Singh v. State of U.P. Ors., AIR 1999 SC 436; Niladri Narayan Chandradhurja v. State of West Bengal, AIR 2002 SC 2532; Northern India Glass Industries v. Jaswant Singh Ors., (2003) 1 SCC 335; and Leelawanti Ors. V. State of Haryana Ors., (2012) 1 SCC 66). 21. In Government of Andhra Pradesh Anr. V. Syed Akbar (Supra), this Court considered this very issue and held that, once the land has vested in the State, it can neither be divested, by virtue of Section 48 of the Act, nor can it be reconveyed to the persons-interested/tenure holders, and that therefore, the question of restitution of possession to the tenure holder, does not arise. (See also: Pratap v. State of Rajasthan, AIR 1996 SC 1296; Chandragauda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dential colony of the employees of the assessee. Consequently, notification was issued on 03.09.1964 under section 4 of LAC Act, which was followed by declaration issued under section 6 of the LAC Act on 10.12.1964. After giving notice under section 9 of the LAC Act, the possession of the said land was handed over to the assessee company on 10.11.1965. An award was published by the Special Land Acquisition Officer on 27.03.1967 and the compensation was awarded to the landholders, who duly accepted the same. Since the assessee company ran into losses, expansion of the said residential colony could not be constructed over the said land and about 66 acres of land could not be developed. A Writ Petition was filed before the Hon ble Bombay High Court by the successors of original owners of land and they challenged the sale of land on the ground that since the lands of petitioners were acquired under Chapter VII of the LAC Act, provisions of section 44A are attracted, the lands could not be sold by the appropriate Government without the permission of the State Government. Further, it was contended that the restoration of the said land should be given to the original land owners since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change of the user in the scheme as per the approved plan. The SLP filed against the said judgment of the Hon ble High Court has been dismissed by the Hon ble Supreme Court vide its order dated 30.08.2001 in SLP (Civil) No.11976/2001. The copy of the judgment of Hon ble High Court and the order of dismissal of SLP by Hon ble Supreme Court are filed on record by the assessee along with additional grounds of appeal raised by it. 21. The first issue to be addressed by us in this regard is the admission of additional grounds of appeal raised by the assessee. Admittedly, before the authorities below, the claim of the assessee was that the land which was allocated to it, was not being used and hence, was not urban land under the provisions of section 2(ea) of LAC Act. However, before us the learned Authorized Representative for the assessee has raised another issue that the land which was acquired by the Government under the LAC Act for public purpose, is not an asset belonging to the assessee, since the said vacant land which has been acquired by the Government under the LAC Act, vests absolutely in the Government. The additional grounds of appeal raised by the assessee are purel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession was given to it and the ownership remained with the Government of India, it cannot be held that the said asset belongs to the assessee, in order to make to liable for inclusion as an asset in the hands of assessee and being part of its net wealth. Applying the ratio laid down by the Hon ble Supreme Court in V. Chandrasekaran Anr. Vs. The Administrative Officer Ors. (supra) and also the ratio laid down in assessee s own case while disposing of Writ Petition by the Hon ble Bombay High Court, we hold that the land which was acquired under the LAC Act for public purpose by making it available for Corporation owned or controlled by the State, then the said land after its acquisition and the announcement of award under section 11 of the LAC Act, the possession of which has to be taken by the Collector, shall thereupon vests absolutely in the Government free from all encumbrances. The assessee does not hold any ownership rights in the said portion of land and it is absolutely with the Government. Once the ownership of land is vested with the Government and where only possession of the said land has been given to the assessee, we find merit in the plea of the assessee that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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