2022 (8) TMI 158 - AT - Wealth-tax

Reopening of Wealth tax assessment - Treating lands at Vastrapur and Rancharda as urban lands - assessee had not included the urban land cost and cash in hand after exemption for wealth chargeable to Wealth Tax - HELD THAT - It is pertinent to note that the said land and the details given by the assessee before us were only related to Talati Certificate which is undated. The other documents which were before us and before the CIT(A), as contended by the assessee, are not showing that the said land were not coming under the urban land definition. AR further contended that the reasons were not supplied to the assessee by reopening the case but since the very basis of reopening was related to the urban land, the assessee was very much aware about the reasons upon which the reopening was made by the Revenue Authorities. Thus, the reopening is valid which is also reiterated by the CIT(A) in paragraph of the order of the CIT(A). Hence ground are dismissed. Lands at Vastrapur and Rancharda were coming under the definition of urban land under section 2(ea)(v) of the Wealth Tax Act as the documents which were produced before the Revenue Authorities and before us clearly does not state that this are agricultural land. The assessee contended that these are agricultural land as per the records of the Government but only document which was on record is related to Talati Certificate which is undated and is not specifying the period of agricultural activity or not specifying the agricultural produce on the said land. Whether any land comes under the urban land or agricultural land, the certificate from Collector should have been placed by the assessee but since the assessee failed to do so it is clear that the said land is urban land and, therefore, the AO rightly made wealth tax addition towards both of these lands. Assessee appeal dismissed.

Summary

Issues:
1. Validity of assessment order under Wealth Tax Act for A.Y. 2010-11.
2. Consideration of lands at Vastrapur and Rancharda as urban or agricultural lands.
3. Justification of levy of interest and intimation of penalty proceedings under W.T. Act, 1957.

Issue 1: Validity of assessment order under Wealth Tax Act for A.Y. 2010-11:
The appellant challenged the assessment order dated 17.07.2019 passed by the CIT(A)-5, Ahmedabad for the Assessment Year 2010-11. The appellant contended that the order passed by the WTO, Ward without observing the principles of natural justice was illegal and invalid. The appellant argued that the AO erred in passing the order without fully considering the explanations and evidence provided. However, the tribunal noted that the appellant failed to submit objections to the validity of the reopening of assessment as reasons recorded were not furnished. The tribunal found that the reopening was valid, as the basis was related to urban land, and the appellant was aware of the reasons for reopening. Consequently, the tribunal dismissed the grounds challenging the validity of the assessment order.

Issue 2: Consideration of lands at Vastrapur and Rancharda as urban or agricultural lands:
The main dispute revolved around whether the lands at Vastrapur and Rancharda should be classified as urban or agricultural lands under section 2(ea)(v) of the Wealth Tax Act. The appellant argued that the lands were agricultural, exempt from wealth tax, as per government records and used for agricultural purposes. The appellant relied on the Finance Act, 2013 amendment and a CBDT Circular to support their claim. However, the tribunal found that the documents presented did not conclusively prove the lands were agricultural. The absence of a Collector's certificate specifying agricultural activities led the tribunal to uphold the AO's decision that the lands were urban, warranting wealth tax inclusion. Consequently, the tribunal dismissed the appeal, affirming the AO's assessment.

Issue 3: Justification of levy of interest and intimation of penalty proceedings under W.T. Act, 1957:
The appellant contested the levy of interest and initiation of penalty proceedings under the Wealth Tax Act, 1957. However, the tribunal did not delve into this issue explicitly in the judgment. The tribunal's decision primarily focused on the classification of the lands and the validity of the assessment order. As a result, the tribunal's judgment did not provide detailed analysis or ruling on the justification of the interest levy and penalty proceedings. Hence, this issue remains unaddressed in the judgment.

In conclusion, the Appellate Tribunal ITAT Ahmedabad, in the case concerning Wealth Tax Appeal for A.Y. 2010-11, upheld the assessment order classifying lands at Vastrapur and Rancharda as urban lands, dismissing the appellant's claims of agricultural classification and exemption from wealth tax. The tribunal emphasized the importance of conclusive evidence in determining land classification and validated the reopening of the assessment based on urban land considerations. While the judgment did not explicitly address the justification of interest levy and penalty proceedings, it provided a comprehensive analysis of the key issues related to the classification of lands under the Wealth Tax Act.