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TMI Blog2015 (5) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... d. - even accepting assessee's claim that there was a building under construction over the land during the relevant time, but no documentary evidence has been brought on record to indicate approval of the appropriate authority for such construction. In course of hearing when the Ld. AR was specifically asked whether there is an approval of the appropriate authority for the construction, he admitted that there is no such approval. That being the case, the conditions of clause-1(b) to Section 2(ea) is not satisfied for claiming exemption from Wealth Tax. - Decision in the case of Commissioner of Wealth Tax and another Vs. Giridhar G.Yadalam [2007 (3) TMI 334 - KARNATAKA HIGH COURT] followed - Decided against assessee. - W.T.A. Nos. 29 & 30/HYD/2013 - - - Dated:- 29-4-2015 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Petitioner : Shri V. Siva Kumar, AR For the Respondent : Shri Rajat Mitra, DR ORDER Per Saktijit Dey, J.M. These two appeals filed by the assessee are against two separate orders, both dated 08-02-2013, of the Ld. Commissioner of Income Tax(Appeals)-III, Hyderabad pertaining to AY. 2003-04 and 2004-05. 2. The only common issue ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eveloper and the assessee on 50:50 basis. The assessee submitted that as per the terms of the agreement the existing structure was demolished and the development work commenced in April, 2002. The assessee submitted that since the property in question is not a vacant land but there was a building under construction over the said land, it cannot be treated as urban land u/s. 2(ea)(v) of the Wealth Tax Act. The AO after considering the submissions of the assessee vis- -vis the facts and material on record observed that the documentary evidences available on record do not indicate that what has been sold by the assessee is land along with building appurtenant thereto. He observed that the explanation of the assessee that for the purpose of reducing the stamp duty, the property was described as land in the agreement is not acceptable. Thus, the AO concluded that as the assessee has failed to establish the fact by furnishing adequate documentary evidence that there was a building constructed over the land, the property in question has to be treated as urban land as mentioned u/s. 2(ea)(v) of the Wealth Tax Act and accordingly assessed the value of the said property to Wealth Tax in both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, construction of a new commercial complex has started after April 2002 itself. The Ld. AR strongly contesting the observations made by the CIT(A) that the illegal constructions made over the said property without obtaining the approval from the competent authority was demolished submitted that when the property was sold, there was a building under construction over the said land and the construction work is still going on. For substantiating its claim, the Ld. AR referred to the application made by the assessee before the competent authority seeking permission for construction of the commercial complex. Thus, the Ld. AR submitted since there is a building under construction over the said land during the relevant previous years, it cannot be subjected to Wealth Tax by treating it as urban land. In support of such contention, the assessee relied upon the decision of the ITAT Cochin bench in the case of Smt. Meera Jacob Vs. WTO (14 SOT 486) wherein it is held that a land on which a building is under construction cannot be treated as urban land. 7. The Ld. DR on the other hand strongly relying upon the findings of Ld.CIT(A) submitted that since the assessee failed to submit any do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been constructed with the approval of the appropriate authority or any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him [or any land held by the assessee as stock-in-trade for a period of ten years from the date of its acquisition by him] ; 9. A plain reading of the aforesaid provision makes it clear that any area comprised within the jurisdiction of a municipality or Cantonment Board which has a population not less than 10,000 according to the land census or in any area which is within such distance not being more than 8 KMs from the local limits of any municipality or Cantonment Board as notified by the Central Government shall be treated as urban land. However, the said provisions also excludes certain categories of land from being treated as urban land if they satisfy conditions mentioned therein. One of them being, land occupied by any building which has been constructed with the approval of the appropriate authority. In the appeal before us, there is no dispute to the fact that the land in question otherwise comes within the definition of 'urban land' as provided under explanation 1(b). Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted (italicized, in print, supplied). Admittedly, in the case on hand, the building is not fully constructed. It is in the process of construction. Building in the process of construction cannot be understood as a building which has been constructed as sought to be argued before us. Courts have to interpret any definition in a reasonable manner for the purpose of fulfilling the object of the Act. Courts cannot interpret a term in such an unreasonable manner making thereby unworkable of the Act as sought to be argued before us. Constructed has its own meaning. Constructed would mean 'fully constructed' as understood in the common parlance. The Tribunal unfortunately, without noticing the intention of the legislature and the specific wordings in the section has chosen to blindly follow its earlier order. If the order of the Tribunal is accepted then neither the owner nor the builder nor the occupant would pay any tax to the Government in terms of the WT Act. In these circumstances, we are unable to accept that argument advanced by the learned counsel for the appellant. On the other hand, we would accept the reasonable argument of the learned counsel for the Department in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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