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TMI Blog2017 (12) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... he vacant land situated in Sheikpet Hyderabad is liable for Wealth Tax when the same is held by the assessee as his stock-in-trade. 1.2. The learned CWT(A) ought to have held that the subject land_ is a business asset/stock-in-trade which the assessee can hold for 10 years from the date of purchase, therefore, the same is not liable for Wealth Tax. 1.3. The learned CWT(A) ought to have considered the evidence on record i.e the Development Agreement entered, which goes to prove that the assessee has purchased the land for the purpose of business exploitation and till such time the asset is held in stock- in-trade. This vital aspect was brushed aside in a casual and summary manner. 1.4. The learned CWT(A) ought to have known that the title of the property (land at Sheikpet, Hyderabad) is under litigation, even during the impugned asst. year, matter pending in a City Civil Court in O.S.N0f248 of 2003 with an injunction order to maintain the status-quo till further orders. In as much as the assessee is prevented from carrying out construction of the building, therefore, the subject land is not coming within the definition of asset u/s.2(ea) of the WT.Act. 1.5. The learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eikpet, Banjarahills, Hyderabad. The assessees have acquired 1195 sq.yds of house site at Shaikpet village, the value of which was shown at Rs. 5,97,50,000/-. During the assessment proceedings, the assessee submitted before the AO that the property in question was stock in trade as per the development agreement entered in to with Vulcon Project Developers Pvt. Ltd and argued that property is exempt from wealth tax. However, the AO found from the income tax returns that the assessee had filed the return of income in ITR-2 declaring income from house property and neither done any business nor declared any income from business. Hence, the AO held that the property is not business asset and liable for wealth tax. Accordingly called for the information from the Joint Sub Registrar-1, Hyderabad, and determined the value of property at Rs. 6,33,35,000/- in the case of Devineni Avinash and Late Raja Sekhar for the A.Y.2008-09 and for the A.Y. 2009-10 determined the value of the property at Rs. 7,17,00,000/- and treated as wealth of the assessee. 7. Aggrieved by the order of the AO, the assessee went on appeal before the CWT(A) and argued that the property in question was stock-intrade and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of any law, except the injunction orders due to disputes hence, the interim orders issued by the city civil court cannot be equated with the law imposing prohibition. Accordingly, the CWT(A) held that the AO rightly assessed the value of property at Rs. 6,33,35,000/- to wealth tax. 9. Aggrieved by the order of the CWT(A), the assessee is in appeal before this Tribunal. 10. Ground No.1.1 to 1.3 are related to the treatment of asset as stock in trade. According to the Ld.AR, the vacant land in Banjara Hills is not assessable for wealth tax since the same is held by the assessee as stock in trade. The assessee is permitted to hold the asset as stock in trade for 10 years from the date of purchase, the Ld.AR further submitted that the development agreement which goes to prove that the assessee has purchased the land for the purpose of business exploitation and till such time the asset is held as stock in trade the same should be treated as business asset and cannot be brushed aside in a casual manner. Accordingly, Ld. AR argued that the asset is stock in trade and required to be excluded from the wealth tax purpose. On the other hand the Ld.DR supported the orders of lower authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chased the land as an investor, therefore, it cannot be considered as stock in trade. 7. The only issue that came up for our consideration is whether the land held by the assessee is an urban land coming within the definition of asset as per section 2(ea) of the Act or is a stock in trade, which is kept outside the definition of asset. It is the contention of the assessee that the land held by him is a stock in trade, therefore, it cannot be considered as an asset. We do not find any merit in the contention of the assessee for the reason that the assessee himself has admitted that he had purchased the land as an investor. It is also an admitted fact that the assessee has filed a statement of affairs before the assessing officer and claimed that the impugned land is an immovable property. Just because land is under Joint Development, it cannot be considered that the asset is held for the purpose of commercial exploitation thereby it is classified as stock-in-trade. The assessee has failed to prove that the impugned land is stock-in-trade with any evidences. On the other hand, the income tax return filed for the assessment year 2009-10 in ITR form-2 which is meant for individual a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39; In relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means - (I) any building or land appurtenant thereto (hereinafter referred to as "house"), whether used for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometers from local limits of any municipality (whether known as municipality, Municipal corporation or by any other name) or a Cantonment Board, but does not include - (1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than (ten lakh rupees); (2) any house for residential or commercial purposes which forms part of stock-in trade; (3) any house which the assessee may occupy for the purposes of any business or profession carried on by him; (4) any residential property that has been let-out for a minimum period of three hundred days in the previous year;- (5) any property in the nature of commercial establishments or complexes; (ii) motor cars (other than those used by the assessee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any building which has been constructed with the approval of the appropriate authority or any unused land held by the assesses for industrial purposes tar a period of two years from the data of Its acqusIt1on 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. Explanation, -- For the purposes of clause (b) of Explanation 1, population" means the population according to the last preceding census of which the relevant figures have been published before the date of valuation. Explanation 2 - For the removal of doubts, it is hereby declare that 'jewellery" does not include the Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Government." 8. It can be seen from the definition extracted above that an urban land squarely comes within the meaning of the expression "assets' under Section 2(ea). Explanation-1 to Section 2(ea) defines "Urban Land" to mean a land situate in any area comprised within the jurisdiction of a municipality, corporation etc. But certain lands are excluded from the definition of the expression "urban land". Under Explanation-1(b) of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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