2020 (3) TMI 1048 - AT - Wealth-tax

Wealth tax assessment - urban land is held by the assessee attracts provisions of section 2(ea) of the Wealth Tax Act or not - HELD THAT - As assessee has not produced any documentary evidence to establish that the lands are used for the agricultural purposes. The CIT(A), therefore, correctly confirmed the orders of AO in both the years under consideration that urban lands owned by the assessee are not at all used for agricultural purposes, therefore, the retrospective amendment made by the Finance Act, 2013 in Explanation 1 to section 2(ea) does not applicable to the case of the assessee. Accordingly, the AO completed the wealth tax assessment vide his order dated 30/12/2011 u/s 16(5) of the Wealth Tax Act, 1957 and made the addition correctly - Decided against assessee

Summary

Issues Involved:
Whether urban land held by the assessee attracts provisions of section 2(ea) of the Wealth Tax Act or not.

Analysis:

1. Delay in Filing Appeals:
The appeals filed by the assessee were delayed by 11 days, which the assessee attributed to unforeseen circumstances. The tribunal, considering the reasonable cause, condoned the delay and admitted the appeals for hearing and adjudication.

2. Interpretation of Section 2(ea) of the Wealth Tax Act:
The primary issue in both appeals was whether the urban lands owned by the assessee fall under the purview of section 2(ea) of the Wealth Tax Act. The Assessing Officer (AO) contended that the lands were not used for agricultural purposes, making the retrospective amendment by the Finance Act, 2013 inapplicable. Consequently, the AO completed the wealth tax assessment and made substantial additions for the respective assessment years.

3. Lack of Evidence on Agricultural Use:
During the appeal before the Commissioner of Wealth Tax (CWT), the assessee argued that the lands were used for agricultural purposes, thus exempt from section 2(ea) as per the retrospective amendment. However, the assessee failed to provide documentary evidence supporting agricultural use. The CWT(A) upheld the AO's orders due to the absence of substantiating evidence.

4. Judicial Interpretation of Agricultural Land:
The CWT(A) referred to the retrospective amendment introduced by the Finance Act, 2013, emphasizing the importance of the land being productively used for agricultural purposes to be excluded from wealth tax. The tribunal highlighted the significance of the phrase "used for agricultural purposes" and the need for demonstrable evidence of agricultural activity to support a claim of exemption.

5. Upholding of CWT(A) Orders:
The tribunal, after reviewing the arguments and evidence presented, concluded that the lands in question were not proven to be used for agricultural purposes. As a result, the tribunal upheld the orders of the CWT(A) and dismissed the appeals raised by the assessee, thereby confirming the original assessment made by the AO.

6. Dismissal of Appeals:
Ultimately, the tribunal dismissed both appeals, affirming the decision of the CWT(A) and upholding the assessment made by the AO. The judgment was pronounced in open court on 6th December 2019, bringing a conclusion to the legal proceedings regarding the taxation of urban lands under the Wealth Tax Act.