2018 (11) TMI 1437 - HC - Wealth-tax

Assessments made on urban land owned by the assessee as covered by the definition clause Section 2(ea) Explanation I (b) - value of urban land taken as on the valuation date - Held that - With respect to the Chandigarh property, the Tribunal found no reason to interfere with the first appellate order. We also find no reason to interfere with the order insofar as the Chandigarh property since, it is on facts and based on the evidence produced by the assessee. - Decided in favour of assessee. With respect to the urban land other than the land in Chandigarh as we noticed when we discussed the First Appellate Authority s order, it is specifically noticed that no evidence was produced with respect to the other lands;as to whether they are beyond the limit as prescribed in Explanation I or are occupied with buildings. No approval for such construction or licences for carrying on business of freezing units were produced by the assessee. In such circumstance, the Tribunal went wrong in finding that there was lack of clarity in the order of the lower authorities. In fact, the lower authorities did not say anything about the lands being occupied by buildings because the assessee did not produce any evidence to show that. In such circumstances, we are of the opinion that the finding of the Tribunal on facts is perverse. The Tribunal ought not to have shifted the burden of proving that the lands were occupied with buildings, on to the shoulders of the Revenue. We see that there is no appearance before this Court and there is no production of any evidence with respect to lands, the value of which was added on, being occupied with buildings. We hence answer the question of law in favour of the Revenue and against the assessee.

Summary

Issues:
1. Assessment of urban land under the Wealth Tax Act, 1957 for the assessment years 2001-02 and 2004-05.

Analysis:
The judgment pertains to four appeals under the Wealth Tax Act, 1957 concerning the assessment of urban land for the years 2001-02 and 2004-05. The primary issue revolves around the interpretation of the definition clause Section 2(ea) Explanation I (b) as applicable during that period. The value of the urban land owned by the assessee was assessed at &8377; 1,71,01,208 for both years. The controversy arose regarding the classification of the land at Chandigarh, situated 10 Kms outside the Municipality limits, and other lands for which no details were provided to establish their status as vacant urban land. The appellant argued that the lands were beyond the specified limit and were occupied by freezer units, thus not meeting the criteria of vacant land under the Explanation to Section 2(ea).

The First Appellate Authority determined that the Chandigarh property fell outside the prescribed limit and directed its exclusion from the assessment. However, the addition made by the Assessing Officer concerning the remaining urban land was upheld. Subsequently, appeals were filed before the Tribunal by both the assessee and the Revenue. The Tribunal upheld the decision regarding the Chandigarh property, citing factual evidence presented by the assessee. On the other hand, concerning the other urban land, the Tribunal raised questions about the existence of freezer units and buildings but found a lack of clarity in the lower authorities' orders due to the absence of evidence provided by the assessee.

The High Court, upon review, deemed the Tribunal's finding on the absence of evidence as erroneous and held that the burden of proof regarding the occupation of buildings on the lands should not have been shifted to the Revenue. Since no evidence was presented to demonstrate the occupation of buildings on the lands in question, the Court ruled in favor of the Revenue and allowed the appeals related to the urban land other than that in Chandigarh. Consequently, the assessments were restored for the urban land, excluding the Chandigarh property. The Court dismissed the appeals related to the Chandigarh property in favor of the assessee and against the Revenue.

In conclusion, the judgment clarifies the criteria for assessing urban land under the Wealth Tax Act, emphasizing the importance of providing evidence to support claims and the burden of proof in such matters. The decision highlights the necessity for clear documentation and substantiation when disputing tax assessments to ensure a fair and accurate determination of liabilities.