2013 (5) TMI 262 - AT - Wealth-tax

Levy of Wealth tax on agricultural land - Reopening of assessment - Held that - Levy of wealth tax on agricultural land situated in urban areas or within specified distance of municipal limit has been decided in the case of Tara Singh vs. DCWT (2005 (7) TMI 281 - ITAT AMRITSAR) in which it had been held that on a plain reading of the provisions of W.T.Act, agricultural land , if situated within the limits of municipal corporation or within 8 km of municipal limits, would be chargeable to Wealth Tax. Since the land in three villages belonging to the assessee fell within the prescribed distance of the municipal limits and no wealth tax return had been filed by the assessee, the AO was justified in coming to the conclusion that wealth belonging to the assessee had escaped assessment. The contention that land in one of the villages mentioned in the reasons recorded was not owned in the relevant previous year does not detract from the action for reassessment taken by the AO since the assessee was owner of land in three other villages which were chargeable to wealth tax. Whether CWT(A) erred in not allowing suitable reduction in the value of land at village Waryana which was low lying and was adjoining to the water body - Held that - No infirmity in the order of the CWT(A) as there was nothing brought on record by the assessee with regard to claim of rebate of 50% with regard to the land at village Wariana. As regards the valuation of land at village Madhar, the order of the CWT(A) in confirming the action of the AO is based on the rates prescribed by the Tehsildar and accordingly, rightly upheld the order of the A.O. appeal against assessee.

Summary

Issues involved:
- Jurisdiction for re-assessment
- Levy of wealth tax on agricultural land
- Valuation of land at different villages
- Exclusion of pond from wealth tax assessment
- Claim of rebate for low lying land
- Valuation of land at village Madhar
- Dismissal of appeals by the assessee

Jurisdiction for re-assessment:
The case involved appeals arising from orders of the Commissioner of Wealth Tax regarding the assessment years 2002-03 to 2006-07. The primary issue was the jurisdiction for re-assessment. The Assessing Officer (AO) initiated reassessment proceedings based on the ownership of agricultural lands falling within urban land definitions. The AO relied on judicial precedents to justify the levy of wealth tax on such lands. The Appellate Tribunal upheld the AO's jurisdiction, citing legal provisions and previous court decisions supporting the inclusion of agricultural land within municipal limits for wealth tax assessment. The Tribunal also addressed the objection raised against the notice issued under section 17 of the Wealth Tax Act, emphasizing that the objection's non-disposal did not invalidate the reassessment proceedings.

Levy of wealth tax on agricultural land:
The Tribunal analyzed the applicability of wealth tax on agricultural land situated within urban areas or near municipal limits. It referenced previous judgments and jurisdictional High Court decisions supporting the levy of wealth tax on such lands. The Tribunal dismissed the argument that agricultural land should be exempt from wealth tax due to being a state subject. It emphasized that legal interpretations and court decisions supersede opinions expressed on government websites. The Tribunal also rejected the claim that wealth tax could not be imposed on agricultural land where construction was not permitted, highlighting the lack of specific legal provisions supporting this argument.

Valuation of land at different villages:
The case involved the valuation of land at various villages owned by the assessee. The AO assessed the value of land based on prescribed rates by the Tehsildar. The Tribunal upheld the valuation done by the AO, finding no irregularities in the valuation process. It specifically addressed the exclusion of a pond from the wealth tax assessment and the consideration of rebates for low lying land, affirming the reasoning provided by the Commissioner of Wealth Tax (CWT).

Dismissal of appeals by the assessee:
The Tribunal dismissed the appeals filed by the assessee for the assessment years 2002-03 to 2006-07. It upheld the orders of the CWT, concluding that the assessments were conducted in accordance with the provisions of the Wealth Tax Act and supported by legal precedents and court decisions. The Tribunal found no merit in the grounds raised by the assessee and affirmed the decisions of the lower authorities regarding jurisdiction, levy of wealth tax, and valuation of land.