2018 (10) TMI 685 - AT - Wealth-tax

Wealth tax assessment of land - Additions to the wealth of the assessee by refusing to accept the claim of the assessee that the five lands in four villages are exempt assets u/s. 2(ea)(v) of the Wealth Tax Act - CIT(A) has deleted the lands situated at Mysuravaripalle Village - Assessee has claimed that these lands are agricultural lands, even though situated within 8 KMs from the municipal limits but construction on these lands is not permissible as these lands were not converted into urban lands Held that - Assessee has not brought on record any evidence in support of the above claim, but she prayed before the Assessing Officer that this may be verified with the SRO and appropriate action may be taken by the Assessing Officer. Now, we noticed from the additional evidence submitted by assessee relating to agricultural activities in the lands situated at Mangalam and Venkatramapuram Villages which are issued by village authorities. Since the additional evidence indicates that these lands were agricultural lands and also the certificates are issued by the Sarpanch of the respective village, in our considered view, this should be verified by the Assessing Officer by making a physical verification of the land and by obtaining proper information from the respective Panchayat Board. Since the assessee has not submitted any evidence relating to two lands situated at Avilala Village, therefore, the Assessing Officer is directed to verify these lands in person and make the appropriate addition or deletion to the wealth of the assessee. Therefore, the appeal filed by the assessee is remitted to the file of the Assessing Officer with a direction to give a proper opportunity of being heard to the assessee.

Summary

Issues Involved:
- Inclusion of agricultural lands as exempt assets under the Wealth Tax Act.

Analysis:
The judgment involves appeals against the common order of the Commissioner of Income Tax (Appeals) for the assessment years 2007-08, 2008-09, and 2009-10. The main issue revolves around the inclusion of agricultural lands claimed as exempt assets under section 2(ea)(v) of the Wealth Tax Act. The assessee filed her return of income for the AY 2007-08 but did not file a return of wealth, leading to scrutiny by the Assessing Officer. The lands owned by the assessee were under question, with the Assessing Officer disputing their classification as exempt assets due to proximity to municipal limits. The Assessing Officer obtained the Fair Market Value from the Sub-Registrar Office and made additions to the wealth.

Upon appeal, the CIT(A) partially allowed relief by considering one land as agricultural and confirming additions for others due to urbanization involvement. The assessee then appealed to the ITAT, submitting additional evidence related to cultivation certificates for specific lands. The ITAT observed that the Assessing Officer had made additions by not accepting the lands as exempt assets, with the CIT(A) deleting one land from the additions. The ITAT directed the Assessing Officer to physically verify the lands with supporting evidence from village authorities for the lands in question. The appeal was remitted back to the Assessing Officer for proper verification and consideration.

The judgment highlights the importance of providing substantial evidence to support claims, especially regarding the classification of assets under tax laws. The ITAT emphasized the need for physical verification and proper documentation to determine the nature of the lands in question. The decision to remit the appeals back to the Assessing Officer underscores the significance of due diligence and thorough examination in tax assessments. Overall, the judgment serves as a reminder of the procedural requirements and evidentiary standards essential in tax disputes to ensure fair and accurate assessments.