2017 (12) TMI 262 - AT - Wealth-tax

Assessment of wealth including agricultural land - Addition made in the context of retrospective amended Explanation-1 to section (ea) of the Wealth Tax Act - Held that - The Wealth Tax Act, 1957 defines the assets in clauses (e) and (ea) of section 2. The assets include the urban land as per subclauses (i) to (v) of section 2(ea). the highlighted portion above excludes two types of land from the definition of urban land . (1) The lands need to be classified in the Government records as an Agricultural land and the same should have been used for agricultural purposes. Thus, these twin conditions are required to be fulfilled by the assessee for claim of exclusion from the definition of an urban land . The second type of land for exclusion from the definition of urban land relates to the land on which no construction of a building was permissible under any law for the time being in force. Such lands are also allowed for claim of exclusion from the definition of urban land . The present issue for adjudication before us relates to the first type of land which deals with the twin conditions of classification of a land as an agricultural land in the Government records and use of the said land for agricultural purposes. Considering all, we are of the opinion that the order of CWT(A) is required to be reversed for both the years. Therefore, considering the principles of natural justice and also the issues of fairness, we remand this issue to the file of the CWT(A) for fresh adjudication in the matter. CWT(A) shall grant reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice. Accordingly, all the grounds raised by the Revenue are allowed for statistical purposes. Appeals of the Revenue are allowed for statistical purposes.

Summary

Issues:
Appeals against CWT(A) orders for AY 2008-09 and 2009-10.

Analysis:
1. Failure of Assessee Representation:
- The Revenue filed appeals against CWT(A) orders for AY 2008-09 and 2009-10 as the assessee did not appear despite notice.

2. Background and Assessment:
- Assessee filed Wealth Tax Return beyond the time limit, selected for scrutiny, and revised wealth declaration.
- AO assessed total wealth including agricultural land as taxable asset.

3. Grounds of Appeal:
- Revenue appealed CWT(A) deletion of the addition of agricultural land value.
- Dispute on application of amended Explanation-1 to section 2(ea) of Wealth Tax Act.

4. Arguments and Analysis:
- Ld. DR argued that CWT(A) erred in relying on a judgment not applicable to the case.
- Dispute on whether the land was used for agricultural purposes, as claimed by the assessee.

5. Judicial Interpretation:
- Tribunal analyzed the definition of "urban land" under Wealth Tax Act.
- Highlighted conditions for exclusion from "urban land" definition, including agricultural land use.

6. Decision and Remand:
- Tribunal found CWT(A) wrongly relied on an irrelevant judgment.
- Remanded the issue back to CWT(A) for fresh adjudication with a fair hearing for the assessee.

7. Final Verdict:
- Both appeals of the Revenue allowed for statistical purposes.
- Order pronounced on 15th November 2017 by the Tribunal.