2019 (4) TMI 1546 - AT - Wealth-tax

Wealth tax assessment - Taxability of flat as rented out for complete financial year - assessee submitted that the flat was let out for more than 300 days in the impugned assessment year and the rental income was admitted on actual basis - HELD THAT - There was no evidence brought on record by the AO to establish that the flat was let out for less than 300 days or the assessee had under stated the rental income, thus the addition was made purely on suspicion. As per law, the AO is not permitted to make any addition on presumptions and surmises unless there is a material on record to show that the flat was not let out for more than 300 days. In the instant case, there was no evidence, hence, the addition made by the AO is unsustainable, accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. Reopening of assessment for escapement of wealth tax - vacant land situated at Rajahmundry consisting of one acre of agricultural land - HELD THAT - On identical facts for the A.Y. 2010-11 to 2013-14 in the assessee s own case this Tribunal held that the said land is agricultural land and has no application of section 2(ea) of W.T.Act . CWT(A) by considering the pattaadaar pass book, sale deed and balance sheet, gave a categorical finding that the land is an agricultural land and section 2(ea) has no application.

Summary

Issues:
1. Appeal filed by revenue against CWT(A) orders
2. Taxability of flat in SLN Towers, Narasimhanagar, Visakhapatnam
3. Escapement of wealth relating to vacant land at Rajahmundry

Issue 1: Appeal filed by revenue against CWT(A) orders
In this case, the revenue filed appeals against the orders of the Commissioner of Wealth Tax (Appeals) [CWT(A)]-3, Visakhapatnam dated 29.03.2018. The Assessing Officer (AO) passed two wealth tax assessment orders for the A.Y.2009-10, and the Ld.CWT(A) passed a common order for both assessment orders. However, the department initially filed a common appeal in a single form for both assessment orders, which was deemed defective. Subsequently, two separate appeals were filed against each assessment order. Due to the defective appeal filing, the original appeal by the revenue became infructuous and was dismissed along with the cross objections of the assessee.

Issue 2: Taxability of flat in SLN Towers, Narasimhanagar, Visakhapatnam
The main issue in this appeal was the taxability of a flat in SLN Towers, Narasimhanagar, Visakhapatnam, which was rented out for the entire financial year. The AO contended that the flat was not let out for more than 300 days during the relevant financial year and valued the property for wealth tax purposes. The CWT(A) deleted the addition made by the AO, stating that there was no evidence to support the claim that the flat was not let out for more than 300 days. The Tribunal upheld the decision of the CWT(A) as the addition made by the AO was based purely on suspicion without any concrete evidence, thereby dismissing the appeal of the revenue.

Issue 3: Escapement of wealth relating to vacant land at Rajahmundry
The assessment was completed for escapement of wealth related to vacant land at Rajahmundry. The AO observed that the assessee was holding one acre of land at Rajahmundry, which was not disclosed in the wealth tax returns. The AO treated the land as vacant urban land and brought its value to wealth tax. However, the CWT(A) found that the land was agricultural based on the documents provided by the assessee. The Tribunal, after reviewing the documents and past decisions, upheld the CWT(A) order, stating that the land was agricultural and exempt from wealth tax. The appeals filed by the revenue and the cross objections by the assessee were dismissed, as the order of the CWT(A) was upheld.

In conclusion, the Tribunal upheld the orders of the CWT(A) in both issues related to the taxability of the flat and the classification of the land, dismissing the appeals filed by the revenue and the cross objections by the assessee.