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Issues: Claim of exemption for a factory site under wealth tax assessment.
The judgment pertains to an appeal regarding the claim of exemption for a factory site under wealth tax assessment. The appellant, a company, entered into a 99-year lease for acquiring a factory site and commenced construction on the site. The Wealth-tax Officer assessed the property's value as taxable since it was not being used as a factory on the valuation date. The CWT (Appeals) upheld the assessment, citing an amendment effective from 1-4-1989 that exempted unused land held for industrial purposes for two years. The main contention was whether the property should be treated as unused land or as a building or land appurtenant used as a factory for taxation under section 40 of the Finance Act, 1983. Upon analysis, the tribunal found that the asset in question, where construction of a factory was in progress, did not fall under the category of "land other than agricultural land" as vacant land lying unused. The legislative intent, as clarified by the proviso, was to exclude land used for business purposes from taxation. The construction work on the factory site indicated active utilization for industrial purposes, distinguishing it from vacant land. Despite the incomplete building on the valuation date, the asset did not fit the criteria for either item (v) or the exception to item (vi) under section 40 of the Finance Act, 1983. The tribunal concluded that the asset being a land under construction for a factory was not subject to taxation and annulled the assessment, allowing the appeal.
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