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TMI Blog2019 (8) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... es and in law has failed to appreciate, that the Assessee has been provided exemption u/s. 2 (ea)(iii) of the W.T. Act without appreciating that the Assessee was not constructing any Industrial Undertaking but intended to develop the said land as Technology Park and lease out or otherwise and to provide for conveniences commonly provided. 3. The Ld. Commissioner of Income tax (Appeals)- III, Kochi under the facts and circumstances and in law has failed to appreciate that the section 2 (ea)(iii) is only applicable in the cases of Industrial Undertaking which the assessee is not. 4. The Ld. Commissioner of Income tax (Appeals)- III, Kochi under the facts and circumstances and in law has failed to appreciate that the decision of CIT Vs. Computerised Accounting and Management Services Pvt. Ltd. (1999) 235 ITR 502 is not applicable in the present case as the said decision is on entirely different facts before the Hon 'ble Court, with regard to provisions of section 32A(b)(iii) of Income-Tax Act, 1961 and not for Wealth Tax Act. 5. The Ld. Commissioner of Income tax (Appeals)- III, Kochi under the facts and circumstances and in law has failed to appreciate that though there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted to the assessee even for leveling of land or filling. Therefore construction of building was not possible on the land. (ii) The assessee-company was incorporated for the purpose of construction of multipurpose complexes for being used as techno parks and hence, the assessee was carrying on industrial activity and the land being acquired for "industrial purposes" is outside the purview of the Wealth-tax during the relevant valuation dates, viz., 31.03.2007 and 31.03.2008. 3.1 The Assessing Officer, however, negatived the contentions / objections raised by the assessee by relying on the letter of Town Planning Officer, Corporation of Trivandrum, dated 14.05.2009. In the said letter, according to the A.O., it has been clearly stated that the construction of building is not prohibited by law in this land. According to the Assessing Officer, the letter further pointed out to the fact that the construction is possible in the land if sanction is obtained from the authorities concerned. The Assessing Officer, therefore, rejected the contention of the assessee that there is prohibition in construction of building in the impugned land. Further, according to the Assessing Officer, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 2(ea) of the WT Act 1957, as brought out by the jurisdiction High Court decision mentioned above. The WTO is in disagreement with the appellant's contention as he finds no proof of assessee doing any industrial activity during the first two years since acquiring the concerned land. The act clearly provides for the exemption of the concerned land from the definition of asset for WT purposes for the first two years since its acquisition even if there is no activity during the first two years. The AO has relied on conjectures to deny the exemption to the appellant for the concerned land by questioning his objectives and hence is not tenable. Though the certificate of the Town Planner provides for construction possibility on the aforesaid land, exemption from the definition of being a taxable asset for the first two years is clearly granted in the statute itself and hence the aforesaid land will qualify for being a taxable asset under the Wealth Tax Act 1957 only from AY 2009-10 onwards. In view of the above ground no. 1 to 5 of the grounds of appeal for AY 2007-08 and 2008-09, are accepted. Ground no.6 to 9 do not merit any decision as the appeal of the assessee is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the valuation date; or (ii) in any area within such distance, not being more than eight kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette, but does not include 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;" 6.2 The above definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objective of the assessee-company. According to us, the Wealth-tax Officer has wrongly drawn support from the omitted provision of "industrial undertaking" to come to a conclusion that the land is not held for industrial purpose. The term used in section 2(ea) of the Wealth-tax Act "land held for industrial purpose" is different from "industrial undertaking". Wealth is leviable only on unproductive asset and not on commercial asset. This is clear from the provisions of Wealth-tax Act, 1957. The Parliament has in its wisdom foreseen that for commencement of an industrial project, it would take minimum two years for securing permission and approval and hence, such land which is held as per the objects of the company for industrial purposes has to be exempted from the levy of wealth-tax for a period of two years from the date of its acquisition. The word "used" in the statute is land held for industrial purpose during the initial two years period. There is no requirement that such land should be actually used for industrial purpose during the said period of initial two years. Therefore, when a company with certain stated objects in its memorandum acquires land to implement the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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