TMI Blog2016 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ese 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(A) after considering the explanations furnished by the assessee, rightly deleted the additions made by the AO. Therefore, we inclined to uphold the order of the CIT(A) and direct the A.O. to exclude the agricultural lands for the purpose of wealth tax. - Decided in favour of assessee Taxability of house property situated at Tirupur - Held that:- On verification of the sale deed, we find that though the property 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(ea) of the Wealth Tax Act, 1957. Therefore, issued a show cause notice and asked to explain why the same shall not be charged to wealth tax. In response to show cause notice, the assessee submitted that these lands are agricultural lands and used for agricultural operations. Though the lands are situated 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 the purpose of wealth tax. To ascertain the correctness of the value determined by the assessee, the A.O., wrote a letter to ACIT ,Circle-1, Tirupur and requested to verify the property and submit his report. The ACIT circle-1, Tirupur has communicated vide his reply dated 13.12.2010 enclosing the enquiry report submitted by the Inspector of Income Tax and as per the enquiry report, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 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 based on the sub registrar value, ignoring the sale deed furnished by the assessee. 7. The CIT(A) after considering the submissions made by the assessee directed the A.O. to exclude the agricultural land situated at Gollapudi within the meaning of capital asset u/s 2(ea) of the Act. The CIT(A) held that as per the amended provisions of section 2(ea)(v) of the Act, with retrospective effect from 1.4.1993, any land classified as agricultural land, in the records of the Government and used for agricultural 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 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are agricultural lands and used for agricultural 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 the purview of the definition of assets as per section 2(ea) of the Act. The CIT(A) after considering the explanations furnished by the assessee, rightly deleted the additions made by the AO. Therefore, we inclined to uphold the order of the CIT(A) and direct the A.O. to exclude the agricultural lands for the purpose of wealth tax. 11. The next issue came up for our consideration is taxability of house property situated at Tirupur. The A.O. determined the value of house property at Tirupur at ₹ 39,25,158/-. According to the A.O., he has determined the value of the property, based on the values obtained from the sub registrar office. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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