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TMI Blog2019 (11) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... port from the DVO in this regard and compute the net wealth and Assessing Officer is also directed to allow the value of debts as on the dates of purchase of plot in the hands of the assessee, if still outstanding. Fair Market Value (FMV) of the land owned by the assessee, as on the date of valuation, was to be included in the hands of the assessee - assessee is also aggrieved by the order of CWT(A) in not allowing the deduction of debts accrued - HELD THAT:- The said issue also stands squarely covered by our decision in own case which was an appeal filed by the Revenue as the CWT(A) in those cases had allowed the claim. Value of the lands to be adopted and the costs of the debts to be allowed - HELD THAT:- In line with our directions above in the case of Rajendra M. Developers and Builders Pvt. Ltd., Assessing Officer shall compute the value of the said land as on the date of valuation of the lands in line with our directions in paras above and also allow the claim of the debts against the value of the property after due verification and if still outstanding. Thus, all these appeals filed by the assessee are allowed for statistical purposes. Escapement of wealth - no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Income Tax Tribunal have been enhanced by the Circular No.17/2019 dated 08.08.2019. It was further pointed out by him that consequent to the said Circular, many of the present appeals filed by the Revenue against the wealth tax assessments made against assessee, are not maintainable, as the CBDT vide Circular No.17/2019 dated 08.08.2019 had prescribed enhanced limits for filing / withdrawal of appeals before the Tribunals; further CBDT vide Circular No.5 of 2019 had directed the monetary limits which were proposed by the CBDT Circular No.3/2018 dated 11.07.2018 in respect of income tax appeals, will also apply to the wealth-tax appeals; consequent thereto, the appeals wherein the tax effect is less than ₹ 50 lakhs would not be maintainable. 4. The Learned Departmental Representative for the Revenue pointed that the monetary limits have been enhanced for filing of appeals by the Department before Income Tax Tribunals vide Circular No.17/2019 dated 08.08.2019 at ₹ 50 lakhs. 5. The learned Authorised Representative for the assessee also pointed out that in all those appeals where the tax effect is less than the limits prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals at Tribunal, it is ₹ 50 lakhs, before the Hon'ble High Courts, it is ₹ 1crore and before the Hon ble Supreme Court, it is ₹ 2 crore. 10. Further, in order to bring at par, the status of appeals decided by separate orders for each assessment years vis- -vis composite orders for more than one assessment year, Para 5 of the Circular is also substituted which reads as under : 5. The Assessing Officer shall calculate the tax effect separately for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. Further, even in the case of composite order of any High Court or appellate authority which involves more than one assessment year and common issues in more than one assessment year, no appeal s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s than the monetary limits fixed under the revised Circular of CBDT, hence, the appeals of the Revenue for assessment years 2008-09 to 2011-12 are not maintainable and the same are dismissed. 15. The Cross-Objections filed by the assessee would become academic and the same are also dismissed for the assessment years 2008-09 to 2011-12. 16. Now coming to the appeal of Revenue for assessment year 2014-15, the learned Authorised Representative for the assessee fairly pointed out that the issue raised in present appeal of the Revenue s stand decided against assessee by the decision of the Hon ble Bombay High Court in the case of Sarovar Hotels Pvt. Ltd., Vs. DCWT in Wealth Tax Appeal Nos.414, 415, 418, 425 and 426 of 2016 with lead order in Wealth Tax Appeal No.414 of 2016 judgment dated 03.12.2018. The learned Authorised Representative for the assessee also pointed out that the only issue which needs to be decided now is the valuation of the land and the allowability of debts against the said value of the land, which are the issues raised in the Cross-Objections. 17. We have heard the rival contentions and perused the record. The issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which mandates obtaining of permission from the Competent Authority before any construction can be carried out. Construction being not permissible is not the same thing as the construction though permissible, must be after obtaining sanction of the prescribed authority. The Tribunal, therefore, was perfectly correct in coming to the conclusion that this exclusion clause would not aid the assessee. In any urban area or for that matter in any area, permission for construction is always regulated through statutory provisions. Unless the prescribed authority - such as - Municipality or local authority, approves building plan and grants permission for construction, no construction can be put up on any land. Such a regulatory mechanism may also have categorical restrictions or divisions, such as, in certain areas, only limited type of development may be permitted. These, controls or regulatory mechanism cannot be equated with construction of a building not being permissible on the land in question. The Tribunal was correct in recording that Assessee had not brought any such prohibition in law to the notice of the Tribunal. It is well accepted principal that restriction and prohibition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority. The Hon'ble High Court held that requirement of the permission for construction would not make construction on the land impermissible. In other words, the asset on which construction could be carried out, though on the prescribed date no such permission was granted by the competent authority for construction or where such construction was not undertaken by the assessee, would not change the status of the land from urban-land under Sec.2(ea) of the Wealth Tax Act. 20. Applying the said ratio laid down by the Hon ble Bombay High Court in the case of Sarover Hotels Pvt. Ltd., (supra), we hold that the lands in question which were non-agricultural lands and against which permission could be granted in future for construction of the building, though not granted on the valuation date, are urban lands as defined u/s 2(ea) of the Act and value of such lands are thus to be included in the net wealth of the assessee. Accordingly, the Assessing Officer is directed to include the value of such urban lands, as on the valuation date, in the hands of the assessee. 21. The assessee vide its Cross-Objections has raised the issue of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the CBDT. Thus, the appeals in WTA Nos.7 to 9 and 12/PUN/2017 and C.O.Nos.48 to 50 and 53/PUN/2017 are dismissed. 25. Now coming to appeals where tax effect is higher than the monetary limits fixed. The issue raised in assessment years 2011-12 and 2012-13 is with regard to the value of the land as on the date of valuation and whether the same is includable as net wealth in the hands of the assessee in the absence of permission received for construction from the competent authority or any construction being carried out, as on the valuation date. We have already decided similar issue in the case of Rajendra M. Developers and Builders Pvt. Ltd., (supra) in the paras above relevant to assessment year 2014-15 in WTA No.35/PUN/2017 and C.O.No.76/PUN/2017. Following the same parity of reasoning, we direct the Assessing Officer to include the value of the aforesaid lands in the hands of the assessee in the respective years. However, for the purpose of determining the value as on the valuation date, the assessee shall file the valuation report from the Registered Valuer or the Assessing Officer may obtain the necessary valuation report from the DVO in this regard and comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies had not filed their wealth tax returns in any assessment year. The Assessing Officer thus issued a notice under Section 17 of the Wealth-Tax Act. In reply to the said notice, assessee filed the return of wealth declaring nil wealth. 29. The question which arises is regarding valuation of land where the assessee group possesses more than 1110 acres of plots in Nashik and in its vicinity, which land bank was accumulated over a period of time and since there were certain embargos in holding the land in the name of individuals, the assessee incorporated different companies and the lands were shown in the hands of the said companies. The Assessing Officer noted that the said companies could not hold agricultural lands as there was embargo in Maharashtra Land Revenue Code. Before the Revenue authorities, the assessee took the stand that the lands were for Industrial and commercial purposes and not for agricultural purposes, hence, could be held by the companies. The Assessing Officer in such facts and circumstances, had correctly recorded the reasons for escapement of wealth and the consequently issued notice u/s 17 of the Act. In such facts and circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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