9911796707
TMI Blog2021 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... The Order of Commissioner of Wealth-Tax (Appeals) upholding the order of assessment is arbitrary and opposed to law and is liable to be set aside. 2.1 The Commissioner of Wealth-Tax (Appeals) erred in holding that the land is vacant land as on the valuation date. 2.2 The Commissioner of Wealth-Tax (Appeals) went wrong in not considering the submissions made before him in the proper perspective. 2.3 The Commissioner of Wealth-Tax (Appeals) went wrong in observing that no documentary evidence have been produced before him to prove that the land was not vacant on the valuation date. The joint development agreements and power of attorneys executed clearly show that the building was demolished only between April 2009 and March 2010. 3.1 The Commissioner of Wealth-Tax (Appeals) erred in confirming the levy of interest u/s. 17B of the wealth tax act. 3.2 The Commissioner of Wealth-Tax (Appeals) failed to note that the assessee was under no obligation either to file the return or to pay wealth tax. 3. The brief facts of the case are that during Income Tax assessment proceedings, it was observed that the assessee's were holding immovable asset, the value of which during the finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wealth of Rs. 14,61,21,900/-. 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the CWT(A). Before the CWT(A), the assessee has challenged reassessment on the ground that notice issued u/s.17 of the Act is wholly bad in law, barred by limitation and liable to be cancelled as bereft of jurisdiction. The assessee has also challenged computation of net wealth on the impugned land by stating that the land in question was not vacant as on the date of valuation, which is evident from various evidences filed by the assessee including Joint Development Agreement with M/s. Sabari Foundations, where it was categorically stated that the developer should commence construction of building after demolition of existing structure on the land. Therefore the observation of the AO that the land was vacant as on the valuation date is incorrect. The ld.CWT(A) after considering relevant submissions of the assessee has rejected legal ground taken challenging reopening of assessment by holding that the reasons recorded for reopening of assessment clearly establishes the fact of escapement of wealth chargeable to tax and thus, there is no merit in the arguments of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additions made by the AO towards urban land. 7. The ld.AR for the assessee submitted that the ld.CWT(A) erred in confirming the additions made by the AO towards land within the definition of asset as defined u/s.2(ea) of the Act, ignoring various evidences filed by the assessee to prove that there was a building in the impugned land and such building was demolished only between April 2009 and March 2010. The ld.AR for the assessee referring to Joint Development Agreement between assessee and M/s. Sabari Foundations dated 04.07.2009 submitted that the clauses very clearly state that the primary objective of the agreement between the parties is for constructing building in the scheduled property after demolishing the existing structures thereon, which clearly indicate that there was a building in the land and said building was subsequently demolished for construction of building. The ld.AR further submitted that although the assessee has received permission from the Corporation of Chennai on 06.08.2007, but demolition was carried out after executing the development agreement with the developer and the said demolition work has been undertaken during financial year 2009-10. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly spelt out the main purpose of agreement and as per which, the sole object of agreement is for construction of building after demolition of existing building. Therefore, from the above it is very clear that at the time of signing joint development agreement there was a building on the impugned land. Unless, there is building, then the question of specifying a condition for demolition of existing building does not arise. Further, the 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. 10. We further noted that the 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. The AO as well as the ld. CWT(A), on the basis of above letter assumed that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Gift Deed dated 25.04.2009 executed by the assessee and other co-owners in favour of CMDA where it was clearly indicated the fact that there was no approval from the authorities for construction of building. Therefore on this count also the arguments of the assessee that there existed a semi-finished or under construction building on the impugned land is incorrect. Further reliance of the assessee on the decision of the jurisdiction High Court in the case of Rohini Hotels Pvt. Ltd., vs. CWT has no application to the facts of the present case, because in the case before the Hon'ble High Court, the evidences clearly prove that the foundation was laid for building a hotel on the impugned land as on the valuation date and under those facts, the Hon'ble High Court came to a conclusion that land on which foundation was laid for building a hotel should be treated as business asset not exigible to wealth tax. On the other hand, the reliance of the AO as well as the CWT(A) on the decision of Hon'ble Karnataka High Court in the case of Giridhar G. Yadalam vs. CWT, clearly held that semi-finished structure or a building under construction cannot be called as building and therefore ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et out during the relevant previous year. Unless these facts are examined, simply on the ground that there was a building in the impugned 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. 13. In this view of the matter and considering facts and circumstances of the case, we are of the considered view that the 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. 14. In the result appeal filed by the assessee for both assessment years are treated as allowed for statistical purpose. 15. WTA Nos.106 & 107/CHNY/2008 The facts and issues involved in these two appeals are identical to the facts and issues which we had considered in WTA No.104 and 105/CHNY/2008 in the case of M/s. Giridhari Govindas (HUF) for the assessment year 2008-09 and 2009-10. The reasons given by us in preceding paras in WTA ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
