TMI Blog2011 (11) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee in the case of ACWT Vs. Shri Shailendra Bhargava (WTA No.15 to 19/ JP/2010 dated 10-06-2011. The ld. DR submitted that the Tribunal s confirmed the order of ld. CIT(A) and observed that finding of the ld CWT(A) could not be controverted by the ld. DR and hence the decision of the ld. CWT(A) was confirmed. In the written submission before us, the ld. DR has controverted all the findings of the CWT(A) and therefore, it was requested that the decision in the case Shri Shailendra Bharvava (supra) should not be followed. Our attention was drawn towards the decision of Hon'ble Apex Court in the case of Distributor (Baroda) (P) Ltd. 1985 AIR 1585, 1985 SCR Supl.(1) 778 in which the Hon'ble Apex Court overruled the earlier decision. It was therefore, submitted that earlier order made in the case of Shri Shailendra Bharvava in respect of the same property should be overruled. Our attention was drawn towards the observations given in the case of Distributor (Baroda) (P) Ltd. (supra) vide which it was stated that to perpetuate an error is no heroism. To rectify is the compulsion of judicial conscience. 2.3 Thereafter the ld. DR drew our attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owners. Similarly, whether the land is designated as industrial or non industrial by any other authority does not have any relevance for taxability of the value of the land as urban land for wealth tax purposes. In the case of the assessee, this property known as Raniwala Oil Mill may have been used as an industry earlier but the assessee has himself not carried on any industrial activity on this property. The A.O found that there was no sign of any industry on this land. The machinery and building were in dilapidated conditions and therefore, this property was nothing but a piece of land. The assessee had himself planned to use and develop this land for commercial construction by treating this as a piece of land. Thus, this property cannot be said to be an industrial land in the hands of the assessee and cannot be exempted from wealth tax on this basis. On this issue Ld. AR of the assessee has claimed that any land on which even one piece of brick is laid cannot be treated as vacant land in view of the decision of Federal Bank 107 ITD 451, 295 ITR 212. This interpretation is misconceived. In the case of CWT vs. Girdhar G. Yadolam 325 ITR 223 Hon ble Karnataka High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment has accepted it prima-facie does not mean that this property cannot be taxed where it is to be taxed as per law. iv)Fourthly, ld. CWT(A) has mentioned that even if this property is included as the asset of the assessee it will be exempt u/s 5(iv) and 5(v). This argument may have been applicable in the case of Sh. Shailendra Bhargawa but will not apply to the assessee because in case of the assessee one house has already been allowed as exempt. v)Fifthly, ld. CWT(A) has held that even if this land is treated as a vacant land it cannot be taxed by virtue of section 4(8)(b) of the W.T Act 1957 in view of the decision of Vyasha Bank Ltd. Vs. DCIT 299 ITR 335. In this regard, it is submitted that the above case is not applicable here because in this case the land was leased out for a short period of time but here the land has been leased for a period of 95 years and the full possession has been handed over to the assessee. The assessee was empowered to use the property in the way be wanted. On the basis of his ownership he had even applied to the UIT for using the land in certain manner which clearly shows that the above property belongs to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this conclusion I draw strength from the finding given in the CWT v/s DCM Limited 290 ITR 615 (Del.), wherein it has been given the finding that we have no doubt in our mind that in order to decide taxability of an asset, we have to go by the factual position as on the valuation date. It is not permitted under law to assume a hypothetical situation which never existed. Further, the terms/provisions contained in the lease deed, which have been relied upon by the Assessing Officer while valuing the land as commercial, can not override the statutory provision of Urban Improvement Act. The terms of the lease deed are subject to the provision of section 73 73B of the Urban Improvement Act. Therefore the reliance placed by the Assessing Officer on this para number 4 of the lease deed is misplaced one. With regard to the nature of land, a reference can be made to the provision of section 73 73B of the Urban Improvement Act, whereby if the land is located in an urban area, then it is the Urban Improvement Trust, which manages/governs the land and provides for change of classification of land, from residential to commercial, from commercial to any other purpose or from industrial to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval not only once but twice vide their refusal letter dated 25.07.1995 and 10.05.2005, and by virtue of exclusion clause of explanation 1 (b) attached to section 2(ea), the land in question goes out of the definition of the urban land. A reference in this regard is made to the finding given by Honourable Delhi High Court in the case of CWT v/s DCM Limited 290 ITR 615, wherein it is stated that the intention of the legislature appears to be that land which falls within the exception afore-referred would have to be excluded from the ambit and scope of the expression urban land . Once the land or any building thereupon making it a combination of land and building is not an urban land, ;then it could not be an asset as defined under s. 2 (ea) of the Act . Secondly, Sh. Babu Lal, the lessor was earlier assessed to tax vis- -vis his share in the asset from assessment year 1982-83 to 1990-91, if the position is so, then the Assessing Officer is estopped from shifting the incidence of tax from lessor to lessee. Once the Assessing Officer has taken a particular view under the given circumstances, then there is no justification for change of the said view, unless and until there are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Trust to convert the land into commercial but this application has not been accepted by the Urban Improvement Trust. The Hon'ble Bombay High Court in the case of CIT Vs. Smt. Debbie Alemao, 331 ITR 59 had an occasion to consider as to whether the land can be considered as agricultural or non-agricultural when the land was shown in the revenue record as an agricultural and no permission for conversion of land was given, No agricultural income shown was considered as non-relevant and the land was considered as agricultural. In the case of Hindustan Industrial Resources Ltd. Vs. ACIT, 221 CTR 710 (Del.), the assessee purchased the land for the purpose of setting up an industry. No agricultural income was shown by the assessee in the return of income. The land was acquired and the award was passed by taking the land in question as agricultural land. The land was not held as industrial land. In the instant case also, the land is industrial land and its conversion has not been approved by the Urban Improvement Trust and therefore, it cannot be said that land is urban land. 3.1 The second issue taken by the ld. DR is that the CWT(A) has taken into account the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue shown by the assessee is beyond the limit prescribed u/s 16A of the Wealth Tax Act. If the difference is beyond the limit mentioned in Section 16A of the Wealth Tax Act then the reference to Valuation Cell is mandatory. Reference is made to the following decisions:- 1.CWT Vs. Raghunath Singh Thakur 304 ITR 268 (HP) 2.Sharbati Devi Jhalani Vs. CWT , 159 ITR 549 (Del.) 3.CWT Vs. L.N. Ahuja, 163 CTR 502 (Del.) 4.Raj Paul Oswal Vs. CWT, 171 ITR 489 (P H) 4.1 The second issue is that CWT(A) has erred in treating the property at Mangal Marg, Station Road, Alwar as not an asset liabel to Wealth Tax. 4.2 This issue is relevant for all the assessment years. 4.3 The AO in his order has mentioned that the property is located in the heart of the city and has made reference to various establishments situated around this land. The AO adopted the DLC rate and determined the value of the property. 4.4 Before the ld CWT(A) , the assessee has made the following submissions 1)This property is known as Krishna Oil Mill, Alwar. The property is in possession of the other persons, who were running the oil mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with with a view to establish that the industrial unit is functioning over the same land. 10)The assessee is engaged in the oil industry since last about 30 years and the said property is also an oil mill, hence the said property is a business asset for the purpose of assets within the meaning of section 2(ea)(i)(3) of the Wealth Tax Act, 1957. 11)The submission given with reference to the Raniwala Oil Mill since it was also an industrial property also finds their application in this property being an industrial unit and commercial establishment and request your honor to kindly consider them while deciding the taxability of this property also. The net result is that the property known as Krishna Oil Mill is not a Urban Land as defined under section 2ea(v) of the Wealth tax Act, 1957. The property is a commercial establishment since 1953 and therefore, it is exempt u/s 2ea(v) of the Wealth tax Act, 1957. That the Krishna Oil Mills consist of kolhu, expeller, filter boiler, electric motors, oil tanks, godowns tin sheds and the nature of the property as such is not covered by any provision of law as assessable under Wealth tax Act, 1957. It is simply a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. DR has submitted that the property is lying vacant during the valuation date relevant to the assessment years under consideration. There is building on this land but such building is in the form of tin shed. Hence, tin shed cannot be considered as a building. No commercial activity has been carried out during the previous year relevant to the assessment year under consideration. The ld. DR also argued that the CWT(A) has erred in holding that property is not owned by the assessee. 4.7 On the other hand, the ld. AR stated that the property is a commercial establishment since 1953. The facts relating to the property is similar to that of Raniwala Oil Mill, Alwar. 4.8 We have heard both the parties. It has been contended before the CWT that the assessee is not in possession of the Mill. Certain civil suits are going on in the Hon'ble High Court as well as in the lower Courts with regard to the ownership over the Mill. We have gone through the papers available in the paper book from pages 9 to 27 .There are civil suits. One of the petitioner has filed the affidavit on 15-07-2005 in the District Court, Alwar in which it has been stated that the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the name of the daughters of the assessee. Such ownership has been accepted in the name of the daughters in the income tax proceedings. Even under Benami Prohibition Act, the property is to be considered to be belonging to the person in whose name it stands otherwise such property cant be acquired by the Govt. The daughters of the assessee are major and therefore, such property cannot be included in the Wealth of the assessee as there is no finding that assessee holds the land in benami name of his daughters. 8.1 The sixth ground of appeal of the revenue is common for all the assessment years wherein the revenue is aggrieved that ld CWT(A) has erred in treating the property at Nagli Khora, Alwar as not an asset liable for Wealth Tax. 8.2 The AO in respect of this property at para 7 of his order has observed as under 7. As per annexure A-20 page 13 assessee purchased a land Khasra No. 139/249 Nangli Khora. The land was just opposite Swroop Villas, Moti Doongir, Alwar, The area of land was 3550 subsequent year and the locaton of the land was on triangle and all the sides were road. Theaa purdfhased land for construction of Cinema Hall or Petrol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which among other things inter alias includes that the said land is reserved for open space or park as per master plan. As such the demised plot of land falls in the exclusion clause and no more remains an asset within the meaning of section 2(ea) of the Wealth Tax Act, 1957 and consequently can not become a part of the net wealth of the assessee within the meaning of section 2(m) of the Wealth Tax Act, 1957. 5.The UIT given the land for 20 years, but before the expiry of the said period of 20 years, the UIT took over the said plot of land from the assessee and given away an another piece of land vide deed of exchange dated 28/08/2003, copy enclosed herewith, which proves to the fact that the assessee was not enjoying the full fledged right as owner of the said plot of land. That by virtue of clause number 2 of land allotment order, all the rights of the assessee vis- -vis the land was only limited right to use only. 6.The learned assessing officer had given the reference of the two pieces of plot on same location on main Moti Dungri road adjoining to GPO and LIC building. The reference of both these plots are out of context in as much as both the said plots ..... X X X X Extracts X X X X X X X X Extracts X X X X
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