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2022 (9) TMI 614 - AT - Wealth-taxWealth tax assessment - Addition in hand in excess as part of the balance sheet and business asset not taxable under the provisions of Section 2(ea) of the Wealth Tax Act - CIT(A) deleted the addition by holding that the Assessee, an individual is engaged in the business and once he is maintaining the books of accounts and cash in hand is in the books of accounts, the same being business asset cannot be added under the provisions of Section 2(ea) - HELD THAT - As the issue is squarely covered and the Assessee s cash in hand pertains to business and is kept as cash in hand as in the balance sheet of the business of the Assessee, the same cannot be treated as an asset u/s.2(ea) of the Act. Hence, this issue in the Revenue s appeal is dismissed. Addition made on account of the urban land at T.Nagar, Chennai - Once the building is under construction, whether to be treated as an asset for the purpose of Wealth Tax? - This issue has been answered by the Co-ordinate Bench of the Tribunal, Cochin Bench in the case of Federal Bank Limited 2005 (11) TMI 190 - ITAT COCHIN we noted that this issue is covered in favour of the Assessee and hence respectfully following the Co-ordinate Bench of this Tribunal, we dismiss this issue of the Revenue s appeal.
Issues Involved:
1. Deletion of addition made on cash in hand in excess of Rs. 15,000/-. 2. Deletion of addition made on account of urban land at T. Nagar, Chennai. Issue-wise Detailed Analysis: 1. Deletion of Addition Made on Cash in Hand in Excess of Rs. 15,000/-: The Revenue challenged the deletion of the addition made by the Assessing Officer on the cash in hand exceeding Rs. 15,000/-, arguing that cash in hand in excess of Rs. 50,000/- is taxable under Section 2(ea) of the Wealth Tax Act, 1957. The Assessee, engaged in the business of Cine Actor and Distribution of Films, maintained business books showing cash in hand of Rs. 27,70,521/-. The Assessing Officer added Rs. 27,05,521/- to the returned wealth. The Commissioner of Income Tax (Appeals) deleted this addition, holding that the cash in hand, being a business asset, cannot be added under Section 2(ea). The Tribunal upheld this view, citing precedents from the Delhi Bench and Indore Bench, which clarified that cash in hand referred to in Section 2(ea)(vi) represents only personal cash and not business assets. Consequently, the Tribunal dismissed the Revenue's appeal on this issue. 2. Deletion of Addition Made on Account of Urban Land at T. Nagar, Chennai: The Revenue also contested the deletion of the addition concerning urban land at T. Nagar, Chennai, valued at Rs. 73,88,400/-. The Assessing Officer treated this property as an asset under Section 2(ea) of the Wealth Tax Act. The Assessee claimed exemption, stating that the land had a building under construction. The Commissioner of Income Tax (Appeals) agreed, noting that the land was not vacant and was being used productively, thus not liable for Wealth Tax. The Tribunal supported this decision, referencing a Cochin Bench ruling in Federal Bank Limited Vs. Joint Commissioner of Wealth Tax, which held that land ceases to be vacant once construction begins. Therefore, the Tribunal dismissed the Revenue's appeal on this issue as well. Conclusion: The Tribunal dismissed the Revenue's appeal in W.T.A Nos.30/CHNY/2008, affirming that the cash in hand related to business assets is not taxable under Section 2(ea) and that land under construction is not considered an asset for Wealth Tax purposes. Consequently, the Cross-Objection by the Assessee was dismissed as infructuous. The order was pronounced on 6th July 2022 at Chennai.
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