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Issues: Valuation of vacant land and claim for exemption under s. 5(1)(iv) of the Wealth Tax Act
Valuation of Vacant Land: The case involved the valuation of 2.18 acres of vacant land at Modi para, Sambalpur for the assessment years 1973-74 & 1974-75. The assessee purchased the land for Rs. 7,000 and disclosed its value at Rs. 9,000, while the WTO valued it at Rs. 200 per decimal considering neighboring land prices. The AAC upheld the valuation based on the assessee's other land purchases in the area. Upon appeal, the Tribunal found in favor of the assessee, noting the disadvantages of the land, lack of data supporting higher valuations, and the recent purchase price close to the valuation date. The Tribunal directed the assessee's valuation to be accepted, deleting the addition made by the WTO. Claim for Exemption under s. 5(1)(iv) of the Wealth Tax Act: The second issue revolved around the claim for exemption under s. 5(1)(iv) of the Wealth Tax Act concerning the construction of a house on a land parcel in Modipara. The WTO rejected the claim stating the construction was incomplete and not fit for human habitation. The AAC upheld the decision, considering an incomplete house not qualifying as a house for exemption. The assessee contended that even an incomplete house should be considered a part of a house for exemption purposes. The Revenue argued that a building under construction cannot be considered a house and must be complete. The Tribunal analyzed the definition of "house" under the Act, considering various interpretations and the legislative intent to reduce wealth inequalities. It concluded that the construction of the house, though spread over multiple assessment years, should not disqualify the claim for exemption. The Tribunal held that the assessee was entitled to the exemption claimed, deleting the additions made by the authorities. In conclusion, the Tribunal allowed the appeals related to both issues and dismissed the cross objections, ruling in favor of the assessee on the valuation of vacant land and the claim for exemption under s. 5(1)(iv) of the Wealth Tax Act.
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