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TMI Blog2021 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... re is building, then the question of specifying a condition for demolition of existing building does not arise. JDA agreement was entered into on 4-7-2009 and said date falls within the financial year 2008-09 relevant to assessment year 2009-10. From the above, it is undoubtedly clear that there was a building up to the end of financial year 31-03-2008 and thus, for the impugned Asst. years 2007-08 and 2008-09 the land was a vacant urban land and the existing building was demolished is not supported by any evidence. Sole basis and evidence for the lower authorities to draw an adverse inference against the assessee is copy of letter from the Corporation of Chennai dated 06.08.2007 where permission has been given for demolition of old structure. AO as well as the ld. CWT(A), on the basis of above letter assumed that the assessee must have demolished existing building immediately after receipt of permission and at the time of entering joint development agreement, the land was vacant - said finding is not supported by any evidence, but purely on suspicion and conjectures. Unless, the AO brings on record any evidence to prove that there was a structure, we cannot concur with findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned land, the same cannot be excluded from the ambit of wealth tax. We, therefore are of the considered view that the AO needs to verify above facts before coming to the conclusion that whether particular asset comes under the definition of asset as defined u/s.2(ea) of the Act or not. Appeals filed by the assessee go back to the file of the AO.Hence, we set aside appeals to the file of AO and direct him to re-examine the issue in light of our findings given hereinabove, in accordance with law. Appeal filed by the assessee for both assessment years are treated as allowed for statistical purpose. - WTA Nos.: 104 And 105/CHNY/2018, WTA Nos.: 106 And 107/CHNY/2018 - - - Dated:- 20-1-2021 - Shri Justice P.P. Bhatt, President And Shri G. Manjunatha, Accountant Member For the Appellants : Shri G.Baskar, Advocate For the Respondent : Shri G.Johnson, Addl.CIT ORDER PER G MANJUNATHA, AM This bunch of four Wealth Tax appeals filed by two different assessee s are directed against separate, but identical orders of the Commissioner of Wealth Tax (Appeals)-4, Chennai dated 10.08.2018 and pertains to the assessment years 2008- 09 and 2009-10. Since facts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment Agreement with M/s. Sabari Foundations and as a consequence, the building was demolished and the asset becomes vacant land as on 31.03.2008 and 31.03.2009. Accordingly, the AO called upon the assessee to explain as to why vacant urban land shall not be included within the definition of asset as defined u/s. 2(ea) of the Wealth tax Act, 1957. In response, the assessee submitted that there was a building in the land as on the valuation date i.e., on 31.03.2008 and 31.03.2009 and only after the Joint Development Agreement with M/s. Sabari Foundations, the building was demolished between April 2009 to March 2010. Therefore, there was a building in the land as on 31-03-2008 and 31-03-2009 and hence, land cannot be included in the definition of asset as defined u/s.2(ea) of the Act. The AO was not convinced with the explanation furnished by the assessee and according to him, in pursuant to Joint Development Agreement with M/s. Sabari Foundations, the building originally existed in the impugned land was demolished and thus, as on the date of valuation of the asset, the land becomes urban vacant land and fall within the ambit of Section 2(ea) of the Act. The AO further was of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee after receipt of necessary permission from the Corporation of Chennai vide letter dated 06.08.2007 has demolished the existing building, so as to enable the developer to start construction of new building and hence the argument of the ld.AR for the assessee that there existed an old building in the land is incorrect. 6. As regards another argument of the ld. AR for the assessee that there existed incomplete or under construction building on the impugned land, the ld.CWT(A) in light of the decision of the Hon ble High Court of Karnataka in the case of Giridhar G. Yadalam vs. CWT in Civil Appeal No.728 to 739 741 to 780 of 2011 SLP(Civil) Nos.19011 19012 of 2012, dated 24.07.2015, held that even if an incomplete or unfinished building existed in that land, the same cannot be considered as building which has been completely erected on the land in order to get it covered by exclusion from the definition of asset as defined u/s.2(ea) of the Act. The CWT(A) has also distinguished the jurisdiction High Court decision in the case of CWT vs. Rohini Hotels (Madras) Ltd., and held that in order to apply the ratio of the jurisdiction High Court, it requires to be ascertained w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .DR on the other hand strongly supporting order of the CWT(A) submitted that the CWT(A) has arrived at clear finding in light of various evidences filed by the assessee that the land in question was a vacant urban land which comes under the definition of asset as defined u/s.2(ea) of the Act and hence, there is no merit in the arguments of the assessee that there existed a building as on the date of valuation of the asset. 9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. Section 2(ea) of the Wealth Tax Act, defines the term assets as per which assets include urban land. There is no dispute with regard to the fact that the land in question was an urban land. The only dispute is with regard to whether the impugned land was a vacant urban land or there existed any building. The AO as well as CWT(A) has brought out various reasons to come to the conclusion that the land in question was a vacant urban land and there was no structure in the impugned land as on the date of valuation of asset. It was the contention of the assessee before the lower authorities is that as on the date of valuation of asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding before commencement of construction, we cannot agree with the findings of the ld. AO and ld. CWT(A). We, therefore are of the considered view that the findings recorded by the lower authorities to conclude that said land is urban vacant land and which comes under the definition of asset as defined u/s 2(ea) of the wealth tax Act, 1957 is incorrect. 11. As regards alternative argument taken by the assessee that there existed incomplete or semi-finished building on the impugned land on the date of valuation and thus the said land fall outside the definition of asset for the purpose of Wealth Tax Act, we find that the ld.CWT(A) has recorded categorical finding in light of various evidences filed by the assessee including Joint Development Agreement dated 04.07.2009 and subsequent Gift Deed dated 25.04.2009 executed by the assessee in favour of CMDA, that all evidences clearly establishes the fact that till the date of execution of second Joint Development Agreement on 04.07.2009, there was no approval etc from the authorities for construction of building on the impugned land. Further assessee has failed to furnish any evidences including sanction plan issued by CMDA for constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used for habitation or not. This is because, to ascertain whether a particular land is a vacant land or a building or a land appurtenant thereto, the condition of building is very much relevant. In case, even if there is building in the land but, if such building is not fit for habitation or it was not used for any habitation for long period, then it cannot be said that there is a building in the land and such land is not vacant land for wealth tax purpose. Further, as per the definition of asset as defined u/s.2(ea) of the Act, any building or land appurtenant thereto is included in the definition of asset, but exemption has been provided to certain assets including any house used for own residential purpose and any residential house that has been let out for a minimum period of 300 days in the previous year and also any property in the nature of commercial establishment or complexes. In case, the assessee had more than one house for residential purpose then only one residential house is considered for exemption from wealth tax. Similarly, if a residential property is let-out, but it has not been let out for more than 300 days in a year, then the same cannot be excluded for wealt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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