2011 (11) TMI 830 - AT - Wealth-tax

Summary

Issues Involved:

1. Taxability of the property at Raniwala Oil Mill, Alwar.
2. Taxability of the property at Mangal Marg, Station Road, Alwar.
3. Taxability of the property at Rishikesh.
4. Valuation of the property at Paharganj.
5. Taxability of the property at Kush Marg, Alwar.
6. Taxability of the property at Nagli Khora, Alwar.

Detailed Analysis:

1. Taxability of the property at Raniwala Oil Mill, Alwar:

The primary issue was whether the property at Raniwala Oil Mill, Alwar, should be considered an asset liable to Wealth Tax. The revenue argued that the property should be treated as urban land since it was not used for industrial purposes by the current owner. The department referenced the case of Distributor (Baroda) (P) Ltd. to support their stance that errors should be rectified. The department also cited the Finance Minister's Budget Speech and the amendments in the Wealth Tax Act aimed at encouraging investment in productive assets. However, the Tribunal upheld the findings of the CIT(A) and previous decisions, including the case of Shri Shailendra Bhargava, confirming that the property should not be treated as urban land for Wealth Tax purposes due to its industrial classification and the refusal of the Urban Improvement Trust to permit construction.

2. Taxability of the property at Mangal Marg, Station Road, Alwar:

The revenue challenged the CIT(A)'s decision that the property at Mangal Marg, Station Road, Alwar, was not liable to Wealth Tax. The property, known as Krishna Oil Mill, was argued by the assessee to be an industrial unit with ongoing civil suits regarding its ownership. The CIT(A) accepted the assessee's submissions, noting that the property was an industrial unit with buildings and sheds constructed with municipal approval. The Tribunal upheld this decision, agreeing that the property should be treated as an industrial establishment and not urban land for Wealth Tax purposes.

3. Taxability of the property at Rishikesh:

The issue was whether the land at Rishikesh should be considered urban land or agricultural land. The assessee contended that the land was agricultural, supported by purchase deeds and revenue records. The Tribunal found no evidence to suggest otherwise and upheld the CIT(A)'s decision that the land was agricultural and not liable to Wealth Tax.

4. Valuation of the property at Paharganj:

For the assessment years 1998-99 and 1999-2000, the revenue disputed the valuation of a small residential room at Paharganj, Delhi. The CIT(A) directed the AO to adopt the sale value of Rs. 60,000, which was the actual sale consideration in the assessment year 2000-01. The Tribunal agreed with this valuation, noting that there was no evidence of understatement of consideration.

5. Taxability of the property at Kush Marg, Alwar:

The revenue argued that the property at Kush Marg, Alwar, should be included in the assessee's wealth. The CIT(A) and the Tribunal found that the property was in the name of the assessee's daughters, who were major, and there was no evidence to suggest that the assessee held the property benami. Thus, the property was not includible in the assessee's wealth for tax purposes.

6. Taxability of the property at Nagli Khora, Alwar:

The revenue contended that the property at Nagli Khora, Alwar, should be treated as commercial land. The assessee argued that the land was reserved for a park as per the Urban Improvement Trust's master plan, and construction was not permissible. The CIT(A) and the Tribunal upheld that the land was not liable to Wealth Tax as it was reserved for park use and no construction was allowed.

Conclusion:

The Tribunal dismissed the revenue's appeals, upholding the CIT(A)'s decisions on all issues, confirming that the properties in question were not liable to Wealth Tax based on their classifications, usage, and legal precedents. The order was pronounced in the open Court on 16-11-2011.