2016 (11) TMI 63 - AT - Wealth-tax

Exemption of the value of the plot to the extent of 500 sq. mts under section 5(1)(vi) of the Wealth Tax Act - CIT(A) treating it as a basic exemption limit and deleting the addition made by the A.O. in respect of such limit - Held that - It is an asset being plot of land comprising of an area of 500 sq. mts or less which is exempt from tax and not up to 500 sq. mts or less. Therefore, the finding of the CWT(A) is not tenable since the assessee possesses the plot of land consisting of 935 sq. yards. Further, we find that the CWT(A) has followed the decision of ITAT in the case of Shri Sunil B. Handa in WTA. 2012 (7) TMI 634 - ITAT, AHMEDABAD for giving relief to the assessee. On perusal of the order of the Tribunal, we find that the Tribunal was concerned with the allowability of exemption of the value of a residential house on a plot of land under section 5(1)(vi) and while giving a finding that the exemption is not allowable in the said case as the construction of the house was not complete, the Tribunal has allowed exemption of the value of the plot upto 500 sq. Mts. Thus, the facts of the said case are distinguishable from the facts of the case before us as we are concerned with the allowability of exemption under the proviso to section 5(1)(vi) of the Wealth Tax Act. Therefore, the stand of the Assessing Officer is upheld and the Revenue s appeals for all the assessment years are allowed. Further, the issue of addition of value of car is not adjudicated by the CWT(A) and is also not contested by assessee before us. Therefore, the assessment order on this issue also attained finality. Therefore, the Revenue s appeals for all the assessment years are allowed.

Summary

Issues:
- Exemption of the value of the plot under section 5(1)(vi) of the Wealth Tax Act
- Deletion of addition made towards the net value of movable property (car) not offered in wealth tax return

Exemption of the value of the plot under section 5(1)(vi) of the Wealth Tax Act:
The Revenue's appeals were based on the CIT(A) allowing exemption of the plot's value up to 500 sq. mts under section 5(1)(vi) of the Wealth Tax Act and deleting the addition made by the Assessing Officer. The Assessing Officer observed that the assessee owned a plot exceeding 500 sq. mts and taxed the entire plot's value. The CWT(A) allowed the assessee's appeal, stating that only the balance plot area exceeding 500 sq. mts should be considered for wealth tax purposes. The Revenue contended that the exemption is only applicable to plots up to 500 sq. mts, not a standard deduction. The ITAT held that the provision exempts assets of 500 sq. mts or less, not up to 500 sq. mts. The ITAT distinguished the case from a previous decision and upheld the Assessing Officer's stand, allowing the Revenue's appeals for all assessment years.

Deletion of addition made towards the net value of movable property (car) not offered in wealth tax return:
The Assessing Officer noted the assessee's failure to include the car's value in the wealth tax return and added it to the taxable wealth. The CWT(A) did not address this issue. The ITAT mentioned that the CWT(A) did not adjudicate on the car value addition, and as it was not contested by the assessee, the assessment order on this issue became final. Therefore, the Revenue's appeals for all assessment years were allowed.

In conclusion, the ITAT Hyderabad upheld the Assessing Officer's decision regarding the exemption of the plot's value under section 5(1)(vi) of the Wealth Tax Act and the addition of the car's value to taxable wealth. The appeals by the Revenue for all assessment years were allowed based on these findings.