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2016 (5) TMI 14 - ITAT VISAKHAPATNAM

2016 (5) TMI 14 - ITAT VISAKHAPATNAM - TMI - Inclusion of Agricultural lands for the purpose of wealth tax - A.O. was of the opinion that though, the lands are agricultural lands, they are situated within the 8 kms. from the local limits of the municipality, therefore, liable for wealth tax - contention of the assessee that the lands are classified as agricultural lands and also used for agricultural purpose as per the revenue records of the Government - Held that:- We find force in the argument .....

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l purposes. The A.O. himself has admitted that these lands are agricultural lands. The only contention of the A.O. is that these lands are situated within 8 kms. from the local limits of municipality. As per the amended definition of urban land, the distance from the municipality is not a criteria to determine whether the lands are assets or not. Once the lands are classified as agricultural lands, in the revenue records of Government and used for agricultural purpose, then the same are outside .....

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operty has been sold for a consideration of ₹ 14,01,000/-, the sub registrar, at the time of registration of the property has collected additional stamp duty and penalty. The sale deed copy was available in the local language of Tamil. Though, English translation copy is available in the file, the details are not clear from the sale deed that whether the market value of the property is at ₹ 14,01,000/- or not. The assessee contends that the market value of the property is at ₹ .....

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In case the market value of the property is at ₹ 14,01,000/- then the same should be adopted for the purpose of determination of taxable wealth. - Decided in favour of revenue for statistical purposes. - W.T.A.No.2/Vizag/2014 - Dated:- 18-3-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri M.N. Murthy Naik, DR For The Respondent : Shri C. Subrahmanyam, AR ORDER PER G. MANJUNATHA, Accountant Member: This appeal filed by the revenue .....

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tax and accordingly, notice u/s 17 of the Wealth Tax Act is issued calling for return of wealth. The A.O. after considering the relevant information has completed the assessment under Wealth Tax Act and determined the net wealth of ₹ 91,06,951/-. 3. During the course of wealth tax assessment proceedings, the A.O. noticed that the assessee has claimed exemption from wealth tax for two agricultural lands situated at Gollapudi and Ibrahimpatnam. On verification of the details filed by the ass .....

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within the limits of the local municipality, as per the amended provisions of section 2(ea) by the Finance Act, 2013 with retrospective effect from 1.4.1993, any lands classified as agricultural lands in the records of the Government and used for agricultural purposes is not a capital asset within the meaning of section 2(ea) of the Act. 4. Similarly, the Assessing Officer noticed that the assessee owned a residential house property at Tottipalayam, which was valued at ₹ 14,01,000/- for t .....

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use notice and asked to explain why the value of ₹ 39,25,158/- determined, based on the values of sub registrar shall not be adopted for the purpose of wealth tax. In response to show cause notice, the assessee submitted that the value determined by the Inspector of Income Tax, based on the sub registrar value is not correct, as subsequently he has sold the property and as per the registered sale deed, the property is sold for a consideration of ₹ 14,01,000/-, therefore requested to .....

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er section 2(ea) of the Act. Similarly, with regard to property at Tirupur, the Assessing Officer held that the property valued based on the values of sub registrar office is the correct market value of the property. Therefore, adopted the value determined based on the values of sub registrar office and brought to wealth tax. 6. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. Th .....

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al land, in the records of the Government and used for agricultural purposes is not a asset within the meaning of section 2(ea) of the Act. Similarly, the assessee submitted that as regards the house property at Tottipalayam, Tirupur, the property was sold for a consideration of ₹ 14,01,000/- on 27.3.2007. Therefore, the value of the property for the previous financial year cannot be more than the market value in the subsequent year. Therefore, the A.O. was erred in adopting the value base .....

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ural purpose is not a asset and therefore, not liable for wealth tax. Similarly, as regards the property at Tottipalayam, Tirupur, the value of property in the previous period cannot be more than the value on the later date. The CIT(A), further, held that when assessee furnished a document evidencing the market value of the property at ₹ 14,01,000/- in the subsequent financial year, the value of the same property cannot be ₹ 39,25,158/- in the previous financial year. Therefore, dire .....

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not admit any agricultural income in his return which also evidenced that the land was not used for agricultural purpose and hence, the land situated at Gollapudi and Ibrahimpatnam are urban lands within the meaning of section 2(ea) of the W.T. Act. 9. On the other hand, the Ld. A.R. of the assessee submitted that the lands are agricultural lands and used for agricultural purposes as per the revenue records of the Government, therefore as per the amended provisions of section 2(ea)(v) of the Ac .....

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section 2(ea) of the Act. The A.O. was of the opinion that though, the lands are agricultural lands, they are situated within the 8 kms. from the local limits of the municipality, therefore, liable for wealth tax. It was the contention of the assessee that the lands are classified as agricultural lands and also used for agricultural purpose as per the revenue records of the Government. We find force in the arguments of the assessee for the reason that the Finance Act, 2013, with retrospective e .....

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. The only contention of the A.O. is that these lands are situated within 8 kms. from the local limits of municipality. As per the amended definition of urban land, the distance from the municipality is not a criteria to determine whether the lands are assets or not. Once the lands are classified as agricultural lands, in the revenue records of Government and used for agricultural purpose, then the same are outside the purview of the definition of assets as per section 2(ea) of the Act. The CIT( .....

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