1983 (9) TMI 138 - AT - Wealth-tax

Agricultural Land, Assessment Proceedings, Notice For Reassessment, Reassessment Proceedings

Issues Involved:

1. Validity of notices issued under section 17 of the Wealth-tax Act, 1957.
2. Status of the land as agricultural or non-agricultural.
3. Valuation of the land for the assessment years 1967-68 to 1972-73.
4. Inclusion of forfeited advance amount in the net wealth for the assessment years 1973-74 to 1976-77.

Detailed Analysis:

1. Validity of Notices Issued Under Section 17:

The assessee contested the validity of notices issued under section 17 for the assessment years 1966-67 to 1969-70, arguing that the notices were addressed to an individual, Sri M.T. Raju, rather than the HUF. The departmental representative contended that the notices were valid as they bore the permanent account number (PAN) specific to the HUF. The Tribunal considered the statutory provisions of section 139A, which came into force from 1-4-1976, and found that these provisions could not be applied retrospectively to the notices issued on 26-11-1974. However, the Tribunal noted that the system of allotment of PANs had been in practice earlier and that the HUF had acknowledged the PAN allotted to it. The Tribunal concluded that there was a consensus ad idem between the WTO and the assessee regarding the identity of the assessee, thus validating the notices issued under section 17.

2. Status of the Land as Agricultural or Non-Agricultural:

The assessee claimed that the lands situated at Dibbalapalem in Visakhapatnam were agricultural lands, supported by entries in the Adangal Register and other evidence. The WTO, however, found that the lands were described as "vacant" and "plots" in the purchase deed, and no agricultural operations were carried out. The Revenue Inspector's testimony corroborated this, stating that no crops were grown during his inspections. The Tribunal reviewed various judicial pronouncements and concluded that the evidence did not establish the lands as agricultural. The Tribunal held that the lands were not agricultural, considering the approved lay-out plan from 1960 and the lack of actual agricultural operations.

3. Valuation of the Land for the Assessment Years 1967-68 to 1972-73:

The assessee contested the valuation of the lands by the departmental valuer, arguing for a lower value based on a registered valuer's report. The AAC had fixed the values based on an agreement to sell the lands in February 1971 for Rs. 6,00,000, adjusting the values for each year. The Tribunal found that the AAC had not adequately analyzed the submissions and material on record. Therefore, the Tribunal set aside the valuations made by the AAC and restored the matter to his file for re-determination, considering all relevant material and submissions.

4. Inclusion of Forfeited Advance Amount in the Net Wealth for the Assessment Years 1973-74 to 1976-77:

The assessee argued for the deletion of Rs. 2,30,000 added to the net wealth for these years, representing the forfeited advance received for the sale of land. The Tribunal noted that the forfeited amount was part of the assessee's wealth and its inclusion was in order. However, the Tribunal directed the WTO to consider the assessee's contention regarding the compromise entered into subsequently, which might affect the valuation of the land.

Conclusion:

The appeal for the assessment year 1966-67 was dismissed, and the appeals for the remaining years were treated as allowed in part for statistical purposes. The Tribunal provided detailed directions for re-evaluating the issues of land valuation and the inclusion of the forfeited advance amount in the net wealth.

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