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2020 (11) TMI 100 - HC - Income TaxNature of land - AO's estimation on the basis of guideline value - whether land in question cannot fall within the definition of Urban Land u/s. 2(ea) of the Wealth Tax Act - HELD THAT - As decided in own cas e 2020 (10) TMI 313 - MADRAS HIGH COURT CIT-A has recorded the factual finding that the land, which is unbuiltable under any law for the time being in force, is not an urban land and as such, is not an asset within the meaning of Section 2(e) (a) of the Wealth Tax Act. The CIT-A also referred to a decision in the case of Prabhakar Keshav Kunde 2010 (8) TMI 926 - BOMBAY HIGH COURT .Thus, considering that factually, the CITA on verification found that the land falls within the prohibited zone CRZ III category. - Decided against the revenue.
Issues:
1. Interpretation of the definition of "Urban Land" under Section 2(ea) of the Wealth Tax Act. 2. Validity of the Assessing Officer's estimation based on guideline value. 3. Consideration of construction restrictions on the land. Issue 1: Interpretation of "Urban Land" Definition The primary issue in this case was whether the lands owned by the assessee fell within the definition of "Urban Land" as per Section 2(ea) of the Wealth Tax Act. The Assessing Officer had computed the value of the land based on guidelines from the Registration Department, disregarding the contention that the land did not qualify as an asset under the Act. The assessee argued that due to proposed road development and construction restrictions, the land did not meet the criteria of "Urban Land." The Tribunal recognized the provisions of Section 2(ea) and the restrictions on construction, leading to the dismissal of the Assessing Officer's assessment. Issue 2: Validity of AO's Estimation The Assessing Officer's decision to value the land based on guideline value without considering the restrictions on construction was challenged by the assessee. The Commissioner of Wealth Tax (Appeals) and the Tribunal both acknowledged the limitations on construction due to proposed road development and coastal zoning regulations. The Tribunal set aside the Assessing Officer's order, emphasizing the importance of complying with the definition of "Urban Land" under the Act. Issue 3: Construction Restrictions The case revolved around the restrictions on construction imposed by the planning authorities due to proposed road development and coastal zone regulations. The Tribunal, supported by recent government notifications and communications, affirmed that no construction was permitted on the land. The decision highlighted the significance of adhering to planning permissions and zoning regulations, ultimately leading to the dismissal of the revenue's appeals. The judgment referenced similar cases and circulars to reinforce the position that the restrictions on construction rendered the property ineligible for wealth tax assessment. In conclusion, the High Court upheld the Tribunal's decision, emphasizing the importance of interpreting the definition of "Urban Land" in alignment with zoning regulations and construction restrictions. The judgment provided a detailed analysis of the issues raised, considering legal precedents and relevant circulars to support the dismissal of the revenue's appeals.
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