2016 (4) TMI 941 - AT - Wealth-tax

Agriculture land situated within the limits of Municipal Corporation of Amritsar - whether CWT(A) has erred in holding that the agriculture land situated within the limits of Municipal Corporation of Amritsar is not taxable thereby allowing the relief by ignoring the provisions of section 2(ea) of the Wealth-tax Act whereby w.e.f. 1.4.93, the urban land is included in the definition of assets ? - Held that - As per proviso to clause (b) of Section 2(ea), the land which is classified as agricultural land in the record of the government and used for agricultural purposes will not be considered as an asset for the purpose of wealth tax. In its written reply before the Assessing Officer, the assessee stated Agricultural land measuring 28K. 10 Marla situated Village Sultanwind as the land is used for agricultural purpose and land as per revenue record is agricultural land . The Assessing Officer has not controverted the above statement of the assessee that the land is agricultural land in the revenue record and has been used for agricultural purposes. Learned DR has requested for setting aside the matter to the file of the Assessing Officer for verification of the above fact. We find that the assessee has stated these facts before the Assessing Officer which have not been controverted. Moreover, the assessment year under consideration is 2000-01 i.e., being more than 15 years old and the tax effect is less than ₹ 1 lakh. Considering all these facts, in our opinion, it would not be a fit case for setting aside the matter to the file of the Assessing Officer for verification. In view of the above facts, we accept the assessee s contention that in respect of the land under consideration, the proviso to Section 2(ea)(b) would be applicable and the same would not be chargeable to wealth tax. Thus, the order of learned CIT(A) is sustained - Decided against revenue.

Summary

Issues:
1. Whether the agriculture land situated within the limits of Municipal Corporation of Amritsar is taxable under the Wealth-tax Act.

Analysis:
The appeal by the Revenue was against the order of the learned CIT(A), Rohtak dated 18th November, 2008, for the assessment year 2000-01. The main ground raised by the Revenue was related to the taxation of agriculture land within the municipal limits of Amritsar under the Wealth-tax Act. The Revenue argued that as per the definition of asset under section 2(ea) of the Wealth-tax Act, the land owned by the assessee should be taxable. However, the counsel for the assessee pointed out the proviso to Section 2(ea), which exempts land recorded as agricultural land within the revenue record and used for agricultural purposes from being considered as an asset for wealth tax purposes.

During the hearing, the counsel for the assessee highlighted that the land in question was used for agricultural purposes as per the revenue record and that this fact was not disputed by the Assessing Officer. The Revenue, in response, requested the matter to be sent back to the Assessing Officer for verification of the land's actual usage and revenue record. However, the Tribunal observed that the facts presented by the assessee were not contested, and considering the age of the assessment year and the tax effect, it was not necessary to send the matter back for verification.

The Tribunal analyzed the provisions of Section 2(ea) of the Wealth-tax Act, particularly the definition of "urban land" and the proviso exempting agricultural land used for agricultural purposes from being considered as an asset for wealth tax. Given that the land in question was classified as agricultural land in the revenue record and used for agricultural purposes, the Tribunal upheld the contention of the assessee. Consequently, the order of the learned CIT(A) was sustained, and the Revenue's appeal was dismissed.

The Tribunal concluded that the land under consideration fell under the proviso to Section 2(ea)(b) of the Wealth-tax Act and was not chargeable to wealth tax. Therefore, the appeal of the Revenue was ultimately dismissed, and the decision was pronounced in open court on 22.04.2016.