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TMI Blog2018 (5) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Revenue in this appeal is that Ld. CWT(A) erred in deleting the addition made by the AO for Rs. 3.30 crores by treating the land as taxable wealth of the assessee. 4. Briefly stated facts are that the assessee is a Stock Exchange approval by SEBI and came into existence w.e.f. 14-12-2005. The assessee is engaged in the activity of facilitating, supporting, controlling and managing in the public interest, business of buying, selling, clearing, dealing and settlement of securities and instruments of all kinds. The assessee has shown the land in its balance sheet at Rs. 3,30,00,032/- only, which was not offered to Wealth Tax. Therefore, the AO show-caused the assessee vide letter dt. 05-10-2012 for including/treating the land as taxable wealth. In compliance thereto, the assessee failed to furnish the necessary details. Therefore, the AO in the absence of relevant information treated the land of Rs. 3,30,00,032/- as wealth chargeable to Wealth Tax for the year under consideration. Accordingly, the land being chargeable to Wealth Tax was added in the total wealth of the assessee. 5. Aggrieved, assessee preferred an appeal to Ld. CWT(A), the assessee before the CWT(A) submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealth Tax. The Ld. D.R. in support of his claim relied on the judgment of Hon'ble Karnataka High Court in the case of Giridhar G. Yadalam reported in 325 ITR 223. 9. The Ld. D.R. also submitted that as per the ledger of the land enclosed in Page No. 37 of the Paper Book, there was no opening balance of the land whereas, the opening balance of the land for Rs. 3,30,00,032/- was incorporated in the books by way of general voucher No.32 dt. 14/12/2005. 10. Similarly, the Ld. DR also submitted that there was nil opening balance for the building under construction as per the ledger enclosed on Page No. 38 of the Paper Book, whereas, the opening balance under the head building was incorporated in the books of the assessee by way of general voucher No. 32 dt. 14/12/2005. 11. In view of the above, the Ld. D.R. submitted that the facts as disclosed by the assessee in the ledger of land vis-à-vis building are not clear. Therefore, it was requested to restore the matter to the file of AO for fresh adjudication in accordance with the law. The Ld. DR vehemently supported the order of the AO. 12. On the other hand, Ld. A.R. submitted that the Hon'ble Kerala High Court in the case of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the amendment introduced to the Act with effect from 1-4-1995, only specified assets are subjected to charge towards tax and all other assets are outside the tax net. For the purpose of levy, assets are classified into two categories, one as productive and the other as nonproductive. Under the provisions of the amended Act, tax is levied only on the non-productive assets, such as a residential house, urban land, jewellery, bullion, motor cars, etc. [Para 4] Admittedly, the assessee utilized the urban land for construction of a commercial building which qualified for exemption from wealth-tax. The department had no case that after construction of the commercial building urban land on which the building was constructed could be separately assessed. On the other hand, once the land is utilized for construction of a commercial building, the value of the land and building enjoys exemption as a productive asset specifically covered by sub-clause (3) of section 2(ea)(i ). No doubt, urban land is specifically covered by the definition clause of an 'asset' and is subject to wealthtax. However, urban land acquired for industrial purpose enjoys tax holiday from wealth-tax for tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er construction the value of the land may be insignificant. It is pertinent to note that building under construction which is work-inprogress is not brought within the definition of 'assets' for the purpose of levy of wealth-tax. The department did not dispute the fact that 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. In the instant case, admittedly, commercial building constructed by the assessee fell within the exemption clause as commercial building and, so much so,it was not subject to wealth-tax. There was no dispute that the land was allotted for commercial purpose which covered industrial use as well. Without construction of the building, the land could not be used for the purpose for which it was allotted and the commencement of construction would be the use of the land for industrial purpose. However, this does not mean that part construction and abandoning further construction will entitle the assessee to exemption because part construction without completion of construction of the building cannot be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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