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TMI Blog2018 (12) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appeal No. 418 of 2016, which are as under: The Appellant-Assessee is a Private Limited Company, engaged in the business of building and operating hotels. For the Assessment Year 2007-08, following questions are presented for our consideration: "(a) Whether on the facts and in the circumstance of the case and in law, the Tribunal was right in holding that lands were includible in net wealth as 'urban land' u/s. 2(ea) (v) of the Act even though permission for construction was not made available to the Appellant during the relevant year? (b) Whether in the facts and circumstances of the case and in law, the Tribunal misdirected itself in holding that the lands held by the Appellant were includible in net wealth, as 'urban l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09 (reletable to Wealth Tax Appeal Nos. 418 of 2016 and 415 of 2016), the lands were held for a period of less then two years and that, therefore, these lands cannot be considered to be urban land; (iii) That in relation to Sri Perumbudur land, there was a building constructed on the land and, therefore, also same would not fall within the definition of 'urban land', as considered in Section 2(ea) (v) of the Wealth Tax Act, 1957 (for short "the Act"). 7 The Tribunal by the impugned Judgment, rejected the Assessee's Appeal, principally holding that, in relation to land on which construction is permissible, after obtaining sanction from the Competent Authority, exclusion clause contained in the definition would not apply. Perusa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory provisions. Section 2 of the Act contains definition of various terms. Clause (ea) of Section 2 contains the definition of term 'assets', in relation to the Assessment Year, commencing on the first day of April, 1993 or any subsequent Assessment Year. Clause (v) thereof, refers to 'urban land'. The term 'urban land' is explained in clause (b) of Explanation I below, the said definition, which reads as under: "(b)'urban land' means land situate (i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a popul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that as per the Tamil Nadu Town Planning Act, without such permission from the local authority, no construction could have been carried out and, therefore, the exclusion clause would apply. 13. This definition excludes from the term 'urban land' on which construction of a building is not permissible under any law for the time being in force. This expression the construction of building not permissible under any law in force, cannot be equated with regulatory requirement of any statutory provision which mandates obtaining of permission from the Competent Authority before any construction can be carried out. Construction being not permissible is not the same thing as the construction though permissible, must be after obtaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was raised before us, it would amount to adding a requirement in the exclusion clause, which the legislature has not prescribed. In our opinion, therefore, there is a clear distinction between a case where the construction of a building is not permissible under any law for the time in force and where construction though permissible, must be preceded by permission, approval or sanction from the prescribed authority. Counsel for the Assessee had argued that the Wealth Tax is to be computed on the basis of net wealth of an Assessee on the prescribed date on which construction of a building was not permissible on the land in question. In our opinion, this argument begs the question. As held by us, requirement of permission for construction wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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