2015 (10) TMI 263 - AT - Wealth-tax

Reopening of wealth tax assessment - non declaration of property - ownership dispute - Held that - though the assessee has disputed his ownership right over the property but he has failed to bring any evidence on record to show that there is any legal dispute with regard to the ownership of the property pending before any Court of law. On the other hand, the documents available on record clearly establish assessee s ownership over the property. - Additions confirmed. - Decided against the assessee. Commercial property or not - Urban Land - asset has not been shown in the return of wealth - Held that - after the amendment of the definition of urban land by the Finance Act, 2013 with retrospective effect from 01.04.1993, land classified as agricultural land in the records of the Government and used for agricultural purpose is outside the purview of urban land. - the nature and character of land in question remained agricultural as on 31.03.2008 as the conversion of land from agriculture to non-agriculture took place only on 27.01.2009 i.e., in the assessment year 2009-2010 - the land having been classified as agricultural land in the records of the Government for the relevant period and used for agriculture, it cannot be treated as urban land. - No addition - Decided in favor of assessee.

Summary

Issues:
1. Assessment to wealth tax value of flat/house located at Somajiguda, Hyderabad.
2. Addition of value of land at Hosakerehalli, Bangalore.

Analysis:

Issue 1: Assessment to wealth tax value of flat/house located at Somajiguda, Hyderabad

The assessee challenged the assessment to wealth tax value of a flat at Somajiguda, Hyderabad. The Assessing Officer (A.O.) reopened the assessment based on available information and noticed that the assessee had not declared the value of the flat in the wealth tax return. The A.O. concluded that the assessee was the owner of the flat and charged wealth tax on it. The assessee contended that the flat was disputed and not in their possession, but failed to provide evidence of any legal dispute. The first appellate authority confirmed the addition, stating that documentary evidence supported the ownership of the property by the assessee. The ITAT observed that the assessee did not present any evidence of a legal dispute over ownership and upheld the addition to the net wealth.

Issue 2: Addition of value of land at Hosakerehalli, Bangalore

The A.O. added the value of land in Hosakerehalli, Bangalore to the net wealth of the assessee, considering it as urban land subject to wealth tax. The assessee argued that as the land remained agricultural as per government records, it should not be treated as urban land. The A.O. rejected this argument, stating that the location of the land in an urban area was sufficient for it to be considered an asset for wealth tax purposes. The first appellate authority upheld the addition, noting that the land was considered urban land as per the statutory definition. The ITAT reviewed the definition of urban land and found that the land, classified as agricultural in government records and used for agriculture, should not be treated as urban land. As the land was agricultural and used for agriculture during the relevant period, the ITAT allowed the appeal and deleted the addition to the net wealth.

In conclusion, the ITAT partially allowed the appeal of the assessee, deleting the addition related to the value of the land at Hosakerehalli, Bangalore.