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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 ..... g to assessment years 2008-09 to 2014-15 against respective orders passed under different sections of the Wealth-tax Act, 1957 (in short 'the Act'). The assessee also filed Cross Objections against the said appeals. Further, assessee in the case of Pariwar Marketing Pvt. Ltd. has filed appeals against consolidated order of CWT(A) - 12, Pune dated 20.07.2017. 2. First, we shall take up appeals filed by Revenue in the case of Rajendra M. Dev. & Build Pvt. Ltd. The Revenue has filed appeals for assessment years 2008-09 to 2011-12 & 2014-15, against which the assessee has raised the Cross Objections. First, we take up appeal of Revenue and Cross Objection of assessee relating to assessment year 2008-09. 3. During the course of hearing, it was pointed out by the learned Authorised Representative that the monetary limits for filing the appeals by the Revenue 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , except where chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against." 8. It was further provided that "the monetary limits specified in para 3 above shall not apply to writ matters.". The said extension of the circular to wealth-tax appeals came into effect from the date of the issue of the said circular. 9. Now the CBDT vide its Circular No.17/2019 dated 08.08.2019 has amended Para 3 of the Circular under which the limits for filing the appeals before the authorities has been enhanced; in respect of appeals at Tribunal, it is Rs. 50 lakhs, before the Hon'ble High Courts, it is Rs. 1crore and before the Hon'ble Supreme Court, it is Rs. 2 crore. 10. Further, in order to bring at par, the status of appeals decided by separate orders for each assessment years vis-à-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 effe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,588/- 36,84,255/- 2010-11 35,29,87,739/- 35,29,877/- 2011-12 22,14,53,502/- 22,14,535/- 14. As the tax effect in assessment years 2008-09 to 2011-12 is less 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, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any law in force, cannot be equated with regulatory requirement of any statutory provision 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oval or sanction from the prescribed authority. 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 valuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried 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 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. Pariwar Marketing Pvt. Ltd. 26. Now we take up the appeals relating to Pariwar Marketing Pvt. Ltd., filed by the assessee. 26.1. In all these appeals which are filed by the assessee, the issue raised is against the order of Commissioner of Wealth-Tax (Appeals) in holding that the Fair Market Value (FMV) of the land owned by the assessee, as on the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, where the assessee had failed to furnish any return of wealth, the reasons recorded for re-opening were correctly recorded, the assessment against escapement of wealth was valid. The consequent issue of notice u/s 17 of the Act and initiation of proceedings u/s 17 of the Act are upheld. We have in the paras above held that the lands owned by the assessee are taxable wealth and to be included in the hands of the assessee, then the claim of the assessee that the aforesaid agricultural lands were exempt from wealth tax do not stand. In any case, no such plea was raised before us. Time and again the assessee pleaded that the lands in question w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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