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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 ..... in both the years , they are disposed off together by a common order for the sake of convenience. 2. Shri.Soumitra Choudhury, Advocate, the Learned AR argued on behalf of the assessee and Shri.D.Banerjee, JCIT, the Learned DR argued on behalf of the revenue. 3. The only issue to be decided in these appeals are that whether the land held for business purposes would be liable for wealth tax. 4. The brief facts of this issue is that the assessee purchased land for the purpose of setting up a four star hotel complex. The land was put in use for the purpose by land filling, leveling , earth filling, soil testing etc for the purpose of construction of hotel building. The assessee had also incurred a sum of Rs. 1,10,341/- towards construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for two years nor it is held as stock in trade thereby exempt for 10 years. On first appeal, the addition was deleted by the Learned CWT (A) who held that the subject mentioned land utilized for development of hotel could be exempt u/s 2(ea) of the Wealth Tax Act, 1957 as it is in the nature of commercial complex and is also a business asset and also stated that the constructed hotel started functioning from Asst Year 2005-06 onwards. Aggrieved, the revenue is in appeal before us on the following ground:- "1. That the Ld. CIT(A) erred in law as well as in facts by treating the land of the assessee company as business asset instead of asset as per sec 2(ea)(v) of the W.T.Act'1957." 5. The Learned DR argued that the Learned CIT(A) had no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the building was used for residential or commercial purposes or for the purpose of maintaining a guest house, because an incomplete building could not possibly either be used for residential or commercial purposes or for purposes of maintaining a guest house. Therefore, the word "building" had to be interpreted to mean a completely built structure having a roof, dwelling place, walls, doors, windows, electric and sanitary fittings etc. If one or more such components were lacking, then it could not possibly be said that the building was a complete structure for the purpose of section 2(ea) of the Act. The assessee was constructing the building after obtaining sanction from the appropriate authority. Therefore, the incomplete building of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Ker.). "The Wealth-tax Act, 1957, was drastically amended with effect from April 1, 1995. After the amendment only specified assets are subjected to charge towards tax and all other assets are outside the tax net. Under the provisions of the amended Act, tax is levied only on non-productive assets such as residential house, urban land, jewellery, bullion, motor cars, etc. Urban land is specifically covered by the definition clause of "asset" and is subject to wealth-tax. However, urban land acquired for industrial purpose enjoys tax holiday from wealth-tax for two years from the date of acquisition by the assessee. If the land is not utilized for industrial purpose within two years, the value of such urban land will be subject to wealth- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set like a building which qualifies for exemption, then the assessee can start availing of exemption even during the period of conversion of such non-productive asset to productive asset. The assesee was allotted a plot at Gurgaon earmarked for institutions by the Haryana Urban Development Authority on December29,1995. The assessee commenced construction of a commercial building in the plot in November 1997, completed the construction of a four storeyed building with basement and started occupying it from March 29, 2000. In the course of assessment for the assessment year 1988-89 the Wealth-tax Officer assessed the value of the land treating it as urban land. This was upheld by the Tribunal. On appeal to the High Court : Held, allowin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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