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TMI Blog2016 (2) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... hens its original stand of urban land meant to be utilized for the purpose of hotel business. Hence the intention of the assessee to utilize the urban land only for the purpose of its hotel business is proved beyond doubt by the subsequent activities of the assessee. The urban land is not liable for wealth tax - Decided in favor of assessee. - WTA Nos. 22 & 23/Kol/2013 - - - Dated:- 23-9-2015 - Shri Mahavir Singh, JM And Shri M. Balaganesh, AM For the Appellant : Shri D. Banerjee, JCIT For the Respondent : Shri S. Choudhury, Advocate ORDER Per Shri M. Balaganesh, AM 1. These appeals of the revenue arises out of the order of the Learned C.W.T.(A) in Appeal No. 188/CIT(A)-I/3(1)/2007-08 dated 29.01.2013 passed aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments of amounts, benefits and royalty. The assessee had right to enter upon the land pursuant to an agreement dated 29.8.1998 and start construction of star hotel thereon and to have and to hold the said hotel for a period of 30 years on a consideration agreed in the form of royalty payable to the owner of land @ 10% of gross revneue of the hotel plus a fixed amount not less than ₹ 1,00,000/- per annum. The owner and its nominee had also subscribed to the equity capital of the developer to the tune of ₹ 1,00,08,100/-. The assessee started the development activities commencing from Asst Year 1999-2000 onwards and also stated the reasons for slow progress in the development work thereon due to Kamtapuri Liberation Front Agitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, then it loses the character of land and on that count itself, it is outside the ambit of wealth tax. The construction activity had started from Asst Year 1999-2000 onwards and hence it falls under the ambit of incomplete building. It is well settled that Incomplete building does not fall within the ambit of assets as defined u/s 2(ea) of the Act as it does not fall within the definition of building , nor does it fall within the purview of urban land . Reliance in this regard is placed on the decision of Punjab Haryana High Court in the case of CWT vs Smt.Neena Jain reported in (2011) 330 ITR 157 (P H). Held, dismissing the appeals, that the contention of the revenue that any building would fall within the definition of assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority was required to record a categorical finding that the building of the assessee was actually exigible to wealth-tax which was lacking in the case of the assessee. Thus the Tribunal was justified and correctly negative the claim of the Revenue and was thus right in holding that the value of house under construction including investment on construction was not liable to wealth-tax. It is also well settled that once the land is utilized for construction purposes with approval of prescribed authority, it ceases to have its identity as vacant land and it cannot be independently valued ; there is no merit in contention that value of urban land could be assessed to wealth tax until completion of construction of building ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er construction which is work-in-progress is not brought within the definition of asset for the purpose of levy of wealth-tax. As and when construction of building is complete on the urban land, there can be no separate assessment of urban land, but assessment is only on the value of the building, if it is not exempted from tax. The commencement of construction is use of the land for industrial purpose. However, this does not mean that part construction and abandoning further construction will entitle the assessee for exemption because part construction without completion of construction of the building cannot be said to be use of the land for commercial or industrial purpose. In view of the exemption available to productive assets, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itled to exemption from wealth-tax in the assessment year 1998-99 in respect of the land. In the instant case, the assessee had held the unused urban land for its hotel industry purposes and started construction activities thereon commencing from Asst Year 1999-2000 onwards after carrying out the activities of land filling, leveling , earth filling, soil testing etc for the purpose of construction of hotel building. It is also observed that the assesee had duly stated the reasons for slow progress in the development work thereon due to Kamtapuri Liberation Front Agitation, other unrest and threats from terrorists in that locality. These facts are not disputed by the Learned AO. The approval for construction of hotel building was obtai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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