2018 (7) TMI 836 - AT - Wealth-tax

Agricultural land used for agricultural purposes as held as a capital asset for the purpose of Wealth tax Act - Held that - On the similar facts, the coordinate bench of this tribunal in the case laws in the case of Devineni Lakshmi Vs. WTO Ward-2(3) 2018 (4) TMI 279 - ITAT VISAKHAPATNAM dismissed the appeal of the revenue holding that on agricultural land, no construction is permissible as per existing laws unless the agricultural land is converted into non-agricultural land. Since facts of the assessee s case are identical, respectfully following the view taken by this Tribunal (supra), we hold that agricultural land used for agricultural purposes cannot be held as a capital asset for the purpose of Wealth tax Act. Accordingly, we uphold the order of the Ld. CIT(A) and dismiss the appeal of the revenue.

Summary

Issues:
Assessment of Wealth tax on property claimed as exempt due to agricultural use.

Analysis:
The appeal was filed by the revenue against the order of the Commissioner of Income Tax (Appeals) regarding the assessment of Wealth tax on a property located near Vijayawada, Andhra Pradesh. The property was claimed as exempt by the assessee as it was being used for agricultural purposes. The Assessing Officer (A.O.) assessed the value of the land to Wealth tax as urban land due to its proximity to Vijayawada Municipal Corporation. The Commissioner of Income Tax (A) allowed the appeal of the assessee based on evidence provided, including Adangal copy and VRO certificate, showing agricultural use of the land. The Commissioner held that the land was not assessable for Wealth tax purposes as per the relevant provisions of the Wealth Tax Act, 1957.

The revenue contended that the land in question was urban land and not exempt under the Wealth Tax Act. However, the assessee argued that even though the land was urban, no construction was permissible as it had not been converted into non-agricultural land. The Tribunal referred to a similar case where it was held that on agricultural land, no construction is permissible unless it is converted into non-agricultural land. The Tribunal upheld the order of the Commissioner of Income Tax (A) based on the evidence provided and dismissed the appeal of the revenue.

The Tribunal held that agricultural land used for agricultural purposes cannot be considered a capital asset for the purpose of Wealth tax. Therefore, the order of the Commissioner of Income Tax (A) was upheld, and the appeal of the revenue was dismissed. The assessee's Cross Objection supporting the Commissioner's order was allowed.