9911796707
TMI Blog2017 (11) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the net wealth of the assessee." 2. Briefly the facts of the case are that the assessee is an individual and filed his wealth tax return on 01.05.2013 declaring wealth of Rs. 39,19,500/-. The assessment was completed by assessing officer vide his order dated 28.03.2014 assessing the total wealth of assessee at Rs. 1,99,26,063/- as against returned wealth of Rs. 39,19,500/- by making addition of Rs. 1,60,06,563/- treating unapproved/agriculture plots/lands as taxable assets which was claimed exempt by assessee u/s 2(ea)(v) explanation 1(b) of the wealth tax Act on the ground that construction was not permissible on those assets as per rules and regulations of Jaipur Development Authority. Further the ld. AO not deducted the loans/debt of Rs. 73,65,129/- claimed to be utilized for acquiring the exempted assets. Being aggrieved, the assessee carried the matter in appeal before the ld CIT(A) who has confirmed the action of the AO and now, the assessee is in appeal before us. 3. Firstly, we refer to the findings of the AO in his assessment order which are reproduced as under:- "For land to become exempt, either it should be classified as agricultural and used for agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in the official Gazette, But does not include land classified as agricultural land in the records of the Government and used for agricultural purposes or land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated or the land occupied by any building which has 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." (v) Thus, the plots which are within the city of Jaipur are exempt if construction is prohibited on such land. It is noted that section 17(1) of the Jaipur Development Authority Act require the permission of JDA for any development activities on such plots but it does not prohibit the construction thereof. The permission could be granted by the JDA subject to fulfilment of prescribed terms and conditions and it cannot be said that the JDA has prohibited construction activities on such lands. It may be mentioned that in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to wealth tax. Since agricultural land is liable to wealth tax as urban land, Commissioner Wealth tax (Appeals) was justified in upholding the stand of the Assessing Officer though for different reasons. Accordingly, there is no infirmity in the order of Assessing Officer treating the agricultural land liable to wealth tax as urban land. [Para 10] (emphasis supplied) In the result, the appeal filed by the assessee is dismissed.[para11]" (vii) it was another contention of the appellant that the agriculture lands were used for agriculture purposes by the appellant itself but the appellant has not supported its contention with any documentary evidence. Further, the reliance placed by the appellant on section 17(1) and 17(5) of the JDA Act is also found to be devoid of any merit as these do not prohibit the construction activities on such lands/plot, as discussed earlier in this order. Therefore, in view of the above discussion, it is held that the AO was justified in making addition of wealth amounting to Rs. 1,60,06,563/- to the net wealth of the appellant and thus the same is hereby sustained. Hence, these grounds of appeal are hereby rejected." 4. During the course of he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove submission that in unapproved schemes or where JDA Patta has not been issued no construction work can be carried out by any person. Since the assessee's plots/lands are not approved by JDA or JDA patta has not been issued, these plots are not permissible for construction. Further, the JDA patta is not issued, the ownership of the land is vest in Government. This may be seen from following:- Category of land Owner Assessee's status Agricultural Land Government The assessee has lease right to cultivate. 90B completed Government. As per section 90B/90A for Rajasthan Land Revenue the land vest in Government and in revenue records the name of JDA is entered as owner The assessee has possession holder. JDA Patta issue Owner assessee Therefore, the assessee cannot raise construction in first two categories of land and the first two category of land are not permissible for construction. The construction of storage, and other utilities and facilities in agricultural land have direct nexus with agricultural activities. In agricultural land the independent construction either residential or commercial cannot be allowed. 4.2 The legislature used the word "not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Sunil Kumar vs. WTO. The facts of this case are not applicable to the case of assessee as this land falls in UP where the provisions of Rajasthan Land Revenue Act and JDA Act are not applicable. 4.5 The assessee relies on the decision of Hon'ble Punjab and Haryana High Court in the case of Amrit Lal Jindal & Sons HUF vs WTO reported in 327 ITR 161 (P&H) wherein it has been held that once no construction is permissible in law then such land would not be "Urban Land". Therefore the lower authorities have erred in making addition/confirming the addition of Rs. 1,60,06,563/- in returned wealth of the assessee by treating unapproved/agriculture plots/lands as taxable assets having market value of Rs. 1,60,06,563/-. 5. We have heard the rival contentions and perused the material available on record. The limited issue under consideration relates to whether the assessee's having various pieces of land/plots falls under the exclusion clause of section 2(ea)(v) read with explanation (b) so as to not fall within the definition of urban land which is otherwise exigible for wealth tax. The explanation (b) to clause of section 2(ea)(v) defines urban land as under: "urban lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter were not issued or colonies were not approved by JDA. Since as per rules and regulations of the JDA the construction are only permissible on the lands/plots for which the JDA has issued the allotment letter and in absence of that no construction can be carried out on such lands/plots and if any construction is carried out thereon without obtaining the approval from JDA/permission of JDA, the same will be illegal construction and JDA may demolish it. In our view, these are merely contentions and however strong these contentions may be, unless and until these contentions are supported by demonstrable evidence which brings out the actual facts and circumstances, the same cannot be accepted. Therefore, we are presently not going into the debate of prohibition vs permission for carrying out construction on these assets as sought by both the parties and various decisions cited in support thereof. There are number of pieces of land/plots which are under consideration. However, there is no material on record to support these contentions in respect of any of these pieces of land/plots. In absence of that, we are constrained to set aside the matter to the file of the AO to exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) ITAT Jodhpur Bench in WTA No. 1/JU/2008 order dated 20.03.2009 in the case of The Lake Palace Hotels & Motels Pvt. Ltd. Vs ACIT Circle-2, Udaipur for AY 1998-99. In this case the assessee owned a land which was given on lease and the assessee received security deposit from East India Hotels Ltd. The security deposit was held as debt and deduction u/s 2(m) of Wealth Tax Act was allowed. The department filed appeal before Hon'ble Rajasthan High Court in the above case listed as Wealth Tax Appeal 1 of 2008 titled as CIT Udaipur Vs. Lake Palace Hotels & Motels Ltd. Hon'ble Rajasthan High Court held that the security deposit received by the assessee against lease is allowable deduction as debt u/s 2(m) of Wealth Tax Act. b) Hon'ble ITAT Jodhpur Bench in M/s Salasar Overseas Pvt Ltd. in WTA No. 2 & 3/JP/2012 (Assessment Years : 2007-08 & 08-09) has held as under:- "We have heard parties with reference to material on record and case laws brought to our notice. The Ld. CWT(A) in appeal has returned a finding of fact that the advances received against plot booking and JDA charges have been utilized for acquisition of gold and car. This finding of fact has neither been assailed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re liable to be included in the net wealth of the appellant. It is trite law that mere statements without any documentary evidence to support such statements are of no use. Therefore, looking to the totality of facts and circumstances of the case, it is held that since the appellant failed to prove the nexus of the debts amounting to Rs. 73,56,129/- with the assets which are to be included in the net wealth of the appellant, the deduction on account of debt amount cannot be allowed to the appellant. Hence, this ground of appeal is hereby rejected." 13. We have heard the rival contentions and perused the material available on record. The requirement of law to determine the net wealth is to reduce the value of all the debts owed by the assessee on the valuation date which have been incurred in relation to the said assets which are exigible to wealth tax. The emphasis is therefore on "debt in relation to the said assets". The assessee would therefore be required to substantiate with demonstrable evidence that the debt has been incurred in relation to such assets. In other words, the proximity or connection with the asset is sine qua non for the purposes of claiming the deduction of d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
