TMI Blog2019 (4) TMI 1610X X X X Extracts X X X X X X X X Extracts X X X X ..... e list of the assets for levy of the wealth-tax, accordingly we set aside the impugned order and direct the Assessing Officer not to include the urban land on which agricultural activity was carried out by the assessee in the list of asset for the purpose of levying the wealth-tax. - Decided in favour of assessee. - W. T. A. Nos. 2, 3 and 4 /Chd/ 2018 (assessment years 2011-12 to 2013-14). - - - Dated:- 28-3-2019 - N. K. SAINI Vice-President and SANJAY GARG Judicial Member For the Assessee : Sudhir Sehgal , Advocate, and Ashok Goyal , Chartered Accountant For the Department : Manjit Singh ORDER N. K. SAINI (VICE-PRESIDENT) .- 1. These three appeals by the assessee are directed against the common order dated October 31, 2018 of the learned Commissioner of Income-tax (Appeals)-3, Gurgaon. 2. Common issues are involved in these appeals which were heard together so these are being disposed of by this consolidated order for the sake of convenience and brevity. 3. First we shall deal with W. T. A. No. 2/Chd/2018 for the assessment year 2011-12 wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin time allowed under the Wealth-tax Act, accordingly notice under section 17 of the Wealth-tax Act 1957 was issued to the assessee. In response the assessee furnished the return of wealth declaring net wealth at nil on February 29, 2016. The Assessing Officer asked the assessee to show cause as to why net wealth amounting to ₹ 9,84,48,238 may not be assessed as per the provisions of the Wealth-tax Act. In response the assessee submitted as under : This has reference to your show-cause notice DCIT/CC-I/CHD/ 2016-17/1400 dated November 28, 2016 in the case of our abovesaid assessee. In this regard we want to state that the assessee-company is in possession of total land of ₹ 9.84 crores as on March 31, 2011 which has been purchased in the year 2008 as agricultural land which is exempt from wealth-tax as per the Explanation provided in section 2(ea)(v) of the Wealth-tax Act, 1957, i. e., agricultural land did not fall under the purview of the wealth-tax provisions. As per section 2(ea) itself provides for exception to each type of assets mentioned in the said clause. If an asset falls under this exception, then the said asset is not an ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculture income/expenses have been shown by the asses see in his return of income from this alleged agricultural land. 5. It is also pertinent to mention here that in the subsequent years the assessee has claimed long-term capital losses from the sale of the same alleged agricultural land. So the justification of the assessee that the said land is not a capital asset is contrary to its own submissions. Further, the assessee was not involved in any kind of agricultural or business activities on this land and this land was shown in the table of fixed assets. It is also a fact that the assessee has not used this land for any agricultural, industrial or business activity. Therefore, considering the above detailed discussion provisions of the Act, the assessee's submission and the facts and circumstances of the case in totality, it is established that the provisions of section 2(ea)(v) of the Wealth-tax Act, 1957 are clearly attracted in this case. Therefore, the net wealth of the assessee is computed as under : Gross wealth ₹ 9,84,48,238 Less : Liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,84,48,238 on account of agricultural land. The assessee-company was in possession of total land ₹ 9,84,48,238 as on March 31, 2012 and the abovementioned agricultural land was purchased by the company in the year 2008. Also, the land was used for agricultural purposes. The same can be corroborated from the girdawari certificate obtained from the Revenue authorities. The learned Assessing Officer had stated in his order that since the assessee was not involved in any kind of real estate development business or trading business and land is also shown under fixed assets, the said land would not get covered under the exclusion from the definition of 'urban land' as per the Explanation to section 2 (ea)(v) . However from above facts it cannot established that the land is not used for the agricultural purposes. As per the Explanation provided in section 2(ea)(v) of the Act, any unused land held by the assessee for industrial purpose for a period of two years from the date of its acquisition or as stock-in-trade for a period of ten years from the date of its acquisition by him is not treated as an asset for wealth-tax purposes, since it is excluded from the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment of the said land as a capital asset under the Income-tax Act, 1961 does not have any impact on the treatment of the said land while computing net wealth under the Wealth-tax Act. Merely because an asset is treated as capital asset for the purposes of the Income-tax Act does not mean that it loses its character of an agricultural land under the Wealth-tax Act, the two being separate laws. The land which is actually agricultural land as per the Government records shall get covered in the specific exclusion from the definition of urban land as per section 2(ea)(v) of the Act. (4) Apropos to point No. 4 of the grounds of appeal, we want to state that nothing had been concealed and no inaccurate particulars had been furnished by the assessee-company. Therefore, the penalty under section 18(1)(c) should not have been initiated. We request your honour to drop the penalty proceeding as the very initiation of the same was not warranted. (5) As regards to the last ground of appeal, we submit that it is general in nature and it provide us opportunity to amend, alter or add or delete any ground, etc. 6.1 The learned Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant company. As the appellant has failed to give any documentary evidence in support of the fact that this land was used for agricultural purposes so as to be excluded from definition of 'urban land' and hence to be added to the assessable wealth of the appellant company. In view of the same, addition made by the Assessing Officer is confirmed. Since similar issue is involved in the assessment year 2012-13 and the assessment year 2013-14, the additions made by the Assessing Officer in these years are also confirmed. 7. Now the assessee is in appeal. 8. The learned counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the land in question was urban agricultural land which is exempt from wealth-tax as it was used for the agricultural purposes. Our attention was drawn towards page Nos. 5 to 10 of the assessee's compilation which is the copy of the khasra, girdawari wherein it has been mentioned that on the land belonging to the assessee paddy and wheat crops were grown/cultivated during the year under consideration. It was further submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's compilation reveals that on the land belonging to the assessee, crop of paddy and wheat were grown, therefore the land in question was used for the purpose of agricultural activity. 13. As regards to the contention of the learned Commissioner of Income-tax-Departmental representative that the agricultural income was not shown by the assessee it is noticed that the issue has been decided by the Income-tax Appellate Tribunal Delhi Bench C New Delhi in the case of ITO v. Gomantak Eximis Ltd. [2018] 53 CCH 106 (Delhi-Trib) wherein in para 17 it has been held as under : 17. However, the aforesaid observations of the learned Assessing Officer stands repudiated : the basis of facts and material on record that; firstly, land revenue shows that it was an agricultural land and some agricultural operation were carried out and simply because assessee had not shown agricultural income that does not mean no agricultural activity was ever carried out ; secondly, even at the time of sale the agricultural land, the land continued to be agricultural land and no change of land used was ever sought at the time of sale and now it has also been brought on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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