1996 (5) TMI 110 - AT - Wealth-tax

Summary

Issues Involved:

1. Inclusion of the value of agricultural land in taxable wealth.
2. Determination of whether the land was agricultural on the valuation date.
3. Valuation of the agricultural land declared surplus under the Urban Land (Ceiling & Regulation) Act, 1976.

Issue-Wise Detailed Analysis:

1. Inclusion of the Value of Agricultural Land in Taxable Wealth:

The assessee contended that the CWT(A) erred in including the value of agricultural land in the taxable wealth. The WTO, Bareilly, determined the value of the land at Rs. 38,59,083, whereas the assessee claimed it should be Rs. 1,80,000. The WTO observed that an agreement for sale was made with Bareilly Development Authority (BDA) on 5th March 1984, and possession was handed over on 21st March 1984. The CIT(A) held that the land could be treated as transferred only after 13th Sept. 1986, when the Land Acquisition Officer passed the necessary order. Therefore, the value of the land was to be determined based on the fact that the land continued to be owned by the appellant on the relevant valuation dates.

2. Determination of Whether the Land was Agricultural on the Valuation Date:

The assessee argued that agricultural operations were carried out on the land at S. No. 239 during the period preceding the valuation date. The CIT(A) concluded that the land could not be regarded as agricultural land, relying on several judgments, including the tests laid down by the Hon'ble Gujarat High Court in CIT vs. Siddharth J. Desai. The Tribunal agreed with the CIT(A) that the land could not be treated as agricultural land for the assessment year 1984-85, as possession was handed over to BDA for residential purposes before the valuation date.

3. Valuation of the Agricultural Land Declared Surplus:

The assessee argued that the land declared surplus under the ULC Act should be valued at Rs. 1,80,000. The CIT(A) observed that the BDA agreed to pay Rs. 39.52 per sq. mt. + 15% solatium, considering the land as surplus under the ULC Act. The Tribunal agreed with the CIT(A) that the value should be determined based on the final sale value received from BDA, but allowed a deduction of 18% p.a. for the uncertainty of the payment period.

Separate Judgments Delivered:

The Tribunal directed the WTO to verify the correct amount of sale consideration paid by BDA and reconcile the difference between Rs. 38,59,083 and Rs. 32,77,981. The Tribunal also directed the WTO to determine the proportionate value of land at S. No. 99, consistent with the valuation confirmed by the Tribunal for the assessment year 1980-81.

Conclusion:

Both appeals were partly allowed, with specific directions for verification and redetermination of the value of the assets in question.