2018 (4) TMI 1560 - AT - Wealth-tax

Exemption claimed by the assessee u/s 2(ea) of the Wealth Tax Act - land is an urban land - revenue s case is that the assessee was allotted 600 sq.yards of site which works out to 502 sq.meters and as per proviso to section 5(vi) of Wealth Tax Act, only 500 sq.meters is entitled for exemption u/s 5(vi), hence the assessee is not entitled for exemption - assessee s case is that as per the sale deed document, the impugned property of 600 sq.yards works out to 500 sq.meters but not 502 sq.meters Held that - DR could not controvert the findings given by the CWT(A) stating that the impugned land was less than 500 sq.meters. The surveyor report establishes that the impugned land was 594.77 sq.yards which is equivalent to 497.30 sq.meters. In the immediately preceding assessment year, the AO did not make any addition with regard to the value of the property at Yousufguda. Therefore, we do not find any infirmity in the order of the CWT(A) and the same is upheld. This issue is involved for the assessment year 2008-09 and 2009-10 and the appeals of the revenue are dismissed for both the assessment years. Appeals of the revenue are dismissed.

Summary

Issues:
1. Exemption claimed under section 2(ea) of the Wealth Tax Act for properties at Enikepadu and Nidamanuru.
2. Taxation of vacant land at MLA Quarters, Yousufguda, Hyderabad under section 5(vi) of the Wealth Tax Act.

Analysis:

Issue 1: Exemption claimed under section 2(ea) of the Wealth Tax Act for properties at Enikepadu and Nidamanuru:
The assessee claimed exemption under section 2(ea) of the Wealth Tax Act for one acre of land at Enikepadu and 2.03 acres of land at Nidamanuru, stating they were agricultural lands. The Assessing Officer (AO) assessed the market value of the properties higher than declared by the assessee, considering them as urban lands. The Commissioner of Wealth Tax (Appeals) (CWT(A)) held that the lands were agricultural and exempt from wealth tax. The CWT(A) referred to Explanation 1 to Section 2(ea) of the Act, stating that the lands were classified as dry agricultural lands and not subject to wealth tax. The Tribunal upheld the CWT(A)'s decision, emphasizing that no evidence was provided to prove the lands were converted for non-agricultural use, thus dismissing the revenue's appeals for the assessment years 2007-08, 2008-09, and 2009-10.

Issue 2: Taxation of vacant land at MLA Quarters, Yousufguda, Hyderabad under section 5(vi) of the Wealth Tax Act:
The AO disputed the exemption claimed by the assessee for a 600 sq.yds vacant land in MLA Quarters, Yousufguda, Hyderabad under section 5(vi) of the Wealth Tax Act, citing that the area exceeded the prescribed limit of 500 sq.meters. The CWT(A) allowed the appeal, stating that the actual measurement was less than 500 sq.meters. The Tribunal reviewed the surveyor's report and the sale deed document, confirming that the plot area was 594.77 sq.yards or 497.30 sq.meters, below the exemption limit. The Tribunal upheld the CWT(A)'s decision, noting that the revenue failed to contest the findings and that no addition was made in the previous assessment year. Consequently, the revenue's appeals for the assessment years 2008-09 and 2009-10 were dismissed.

In conclusion, the Tribunal upheld the CWT(A)'s decisions in both issues, dismissing the revenue's appeals for all assessment years involved.