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Chamunda Pharma Machinery P. Ltd. Versus ITO, Ward-1 (3) , Ahmedabad

2016 (5) TMI 45 - ITAT AHMEDABAD

Addition of urban land to the net wealth of the appellant-company - Held that:- It is assessee’s contention that assessee has incurred substantial expenditure on construction of factory building and in subsequent years the business of the assessee is being shown from that building. It is also assessee’s submission that it had furnished the details of the construction expenses of factory building which has not been considered by CIT(A). Before us, Revenue has not placed any material on record to .....

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nity of hearing to both the parties. Assessee is also directed to furnish promptly all the details called for by the authorites. Thus, the issue is set aside to the file of ld. CWT(A) without deciding the issue on merit. - Decided in favour of assessee for statistical purposes - WTA No. 11/Ahd/2015 - Dated:- 6-4-2016 - Shri Shailendra Kumar Yadav, Judicial Member And Shri Anil Chaturvedi, Accountant Member For the Petitioner : Shri P. M. Mehta, A.R. For the Respondent : Smt. Sonia Kumar, Sr. D.R .....

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and that assessee had not filed its return of net wealth though assessee was required to file the return of wealth. He, therefore issued notice u/s.17 of the Wealth Tax Act on 25.03.2013 asking the assessee to file the return of Wealth. In response to the notice, assessee filed the return of Wealth declaring net wealth of ₹ 28,35,600/-. Thereafter, notice u/s.16(2) fo the Act was issued and subsequently, assessment was framed u/s.16(3) r.w.s. 17 of the Wealth Tax Act and the total net wea .....

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8377; 1,74,23,087/- made by the Wealth-tax Officer to the net wealth of the appellant-company in spite of the fact that the urban land acquired by the appellant-company was outside the purview of definition of urban land contained in section 2(ea)(b) of the W.T. Act. 4. A.O. while perusing the computation of net wealth noticed that assessee acquired free hold land, the value of which ₹ 1,74,23,087/- and which was not considered by the assessee as being liable for wealth tax. The assessee w .....

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nsidered the value of land and made addition of it to the net wealth of the assessee. 5. Aggrieved by the order of A.O., Assessee carried the matter before the ld. CIT(A) who upheld the order of A.O. by holding as under: 4. I have carefully considered wealth tax order and submission filed by Appellant. The undisputed facts of the present case are that Appellant has acquired freehold land at Changodar for ₹ 1,74,23,087 during the year under consideration. During the course of Assessment Pro .....

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(ea)(d) of the Act which defines urban land and it has been stated that as land is used for industrial purpose, same is not liable for wealth tax liability. The Appellant has a/so referred to decisions of Hon'ble Kerala High Court and Hon'ble Cochin I.T.A.T., wherein it is held that even if construction activities continues for a period of more than two years, land will be outside the purview of wealth tax. 4.1 On careful consideration of entire facts it is observed that freehold land wa .....

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rban land. In the present case, land is acquired for industrial purpose but Appellant has not proved how such land is used for its business purpose in subsequent Assessment Years. The Appellant has submitted details regarding construction of factory premises in subsequent Assessment Year but not submitted details of completion of such construction or capitalization in books of account for subsequent Assessment Years. Even Appellant has not proved that construction was completed within two years .....

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ason that the land was purchased for construction of factory the building and the construction actually began in the year 2008 onwards and it was not open urban land. He further submitted that on the said land, factory building and office has been constructed and business is being run and therefore, the question of payment of wealth tax on the said land does not arise. He further submitted that assessee had filed detailed paper book which contained complete details regarding construction activit .....

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(A) confirmed the action of A.O. on irrelevant grounds. He further submitted that the issue is also covered in favour of the assessee by the decision of Hon ble Kerala High Court in the case of Apollo Tyres Ltd. vs. ACIT, 325 ITR 528 and various other decisions. He, therefore, submitted that in the absence of any clear finding by ld. CIT(A), the matter may be restored back to the file of CIT(A) to re-examine the issue and decide thereafter. Ld. D.R. on the other hand supported the orders of lowe .....

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