TMI Blog2016 (7) TMI 422X X X X Extracts X X X X X X X X Extracts X X X X ..... f business but not the assessee. The assessee has purchased the land as an investor, consequently any gains from the land would be assessable under the head income from capital gains. Therefore, we are of the view that the assessee has failed to prove that the impugned land held by him is stock-in-trade. In the present case on hand, admittedly the land held by the assessee is an urban land. However, by virtue of a injunction order from the court, status quo should be maintained on the impugned land therefore, land on which construction of a building is not permissible under any law for the time being in force is not an urban land within the meaning of asset u/s 2(ea) of the Act. Therefore, we are of the view that the asset held by the assessee is not urban land, coming within the definition of assets as defined u/s 2(ea) of the Act. Therefore, we set aside the order of CIT(A) and direct the A.O. to delete the impugned land from the definition of assets for the purpose of wealth tax. - Decided in favour of assessee. - W.T.A.No.1/Vizag/2015 - - - Dated:- 10-6-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri C. Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purchased the land for the purpose of business exploitation and till such time the asset is held in stock-in-trade. This vital aspect was brushed aside in a casual and summary manner. 1.4 The conclusions drawn by the CWT(A) at para-5.3 of his order, while negating the claim of the assessee, are his own views, though countered by the assessee not considered by the CWT(A) in a judicious manner. 1.5 The learned CWT(A) failed to consider the submission of the assessee in the right perspective instead in a summary and casual manner concluded that the subject asset is liable for Wealth Tax and this way affirmed the action of the assessing officer. 1.6 Aggrieved by the orders the assessee is in appeal before the Hon ble ITAT to seek justice. 4. The assessee also raised an additional ground. However, the same has been not pressed during the course of hearing. Therefore, the additional ground raised by the assessee has been dismissed as not pressed. 5. The Ld. A.R. for the assessee submitted that the Ld. CWT(A) was erred in holding that the land held by the assessee is an asset within the meaning of section 2(ea) of the Act. The A.R. further submitted that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities below. The factual matrix of the case which leads to levy of wealth tax is that assessee has purchased a land on 30.7.2007 and on the next day a MOU was entered into with the developer for developing the said land. The A.O. was of the opinion that the land held by the assessee is coming under the definition of urban land as defined u/s 2(ea) of the Act. The A.O. further was of the opinion that the assessee has purchased the land as an investor which was proved by his conduct that he had disclosed the said asset to the department as investment. It is the contention of the assessee that the land held by him is stock in trade which is kept outside the purview of the definition of asset u/s 2(ea) of the Act. The assessee further contended that he had purchased the land for the purpose of commercial exploitation which was evidenced by the fact that he had entered into a JDA on the next day of the purchase of land, therefore, it cannot be considered as asset for the purpose of wealth tax. It was further contended that just because he has disclosed the said land in the statement of affairs filed before the department under immovable properties would not alter the character of land. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree in original suit on 13-10-2015. Between this period i.e., from 23-07-2003 to 13-10-2015, the land is under court injunction and hence, no activity can be taken up on the said land. Therefore, any land on which construction of a building is not permissible under any law for the time being in force is not an urban land, which is coming within the definition of assets u/s 2(ea) of the Act. To this effect, filed copy of injection order and decree copy of City Civil Court, Hyderabad and also relied upon the decision of High Court of Bombay at Goa in the case of Prabhakar Kesav Kunde and Others Vs CIT (2010) 235 CTR 119. We find force in the arguments of the assessee for the reason that any land on which construction of a building is not permissible under any law for the time being in force is not urban land coming within the meaning of asset as defined under sec. 2(ea) of the Act. In the present case on hand, on perusal of the facts available on record, we find that a city civil court granted an injunction on the property in the year 2003, vide O.S. no. 248 of 2003 which was in operation till 13-10-2015, when the court passed its final decree and during this period the land was unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property excluding the non-buildable (non-urban land), the above matter would have to be remanded back to the AO for determining what portion of the land was buildable and what portion of the land was not buildable, and the value of the respective portions. Needless to say that the portion which was not buildable cannot be regarded as an urban land within the meaning of s. 2(ea) and cannot be included in computing taxable wealth of the assessee. The impugned orders are set aside and the matters are remanded back to the AO for determination and computation of the taxable wealth afresh in the light of what is stated above . 10. In the present case on hand, admittedly the land held by the assessee is an urban land. However, by virtue of a injunction order from the court, status quo should be maintained on the impugned land therefore, land on which construction of a building is not permissible under any law for the time being in force is not an urban land within the meaning of asset u/s 2(ea) of the Act. Therefore, we are of the view that the asset held by the assessee is not urban land, coming within the definition of assets as defined u/s 2(ea) of the Act. Therefore, we set a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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