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TMI Blog2014 (7) TMI 1376X X X X Extracts X X X X X X X X Extracts X X X X ..... e is dismissed. Property at Nangali Khor, it has not been disputed that in lieu of assessee's two plots, the impugned plot was allotted to the assessee for 99 years lease. As per plain meaning of legal fiction of section 4(8) of the Wealth Tax Act, it applies only to leasehold right in a building and not on the land. The scope of fiction cannot be enlarged by intendment. In view thereof, we see no infirmity in the order of the ld. CWT(A) which has been passed keeping in view the plain meaning of Section 4(8) of the Wealth Tax Act and the decisions of Hon'ble Supreme Court in the case of CWT vs. Biswanath Chatterjee [ 1976 (4) TMI 1 - SUPREME COURT] and case of Vysya Bank Ltd. [ 2007 (2) TMI 161 - KARNATAKA HIGH COURT] . Thus the order of ld. CWT(A) is upheld. The ground raised by the Revenue is dismissed. - WTA No. 4/JP/2012 - - - Dated:- 18-7-2014 - SHRI R.P. TOLANI AND SHRI T.R. MEENA For the Department : Shri A.K. Khandelwal For the Assessee : Shri P.C. Parwal ORDER PER R.P. TOLANI, JM This is an appeal filed by the Revenue against order of the ld. CWT(A), Alwar dated 05-06-2012 for the assessment year 2004-05 wherein the Revenue has rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constructed on this land the value of such building has to be brought to tax as per the provisions of Section 2(ea)(i) of the Wealth Tax Act. 4. Apropos the value of land at Rishikesh, this addition has also been deleted by the ld. CWT(A) relying on other co-owner of the property Shri Vijay Kumar Data which has not been accepted by the Revenue. As per Section 2(ea)(v), Explanation 1(b) any land within municipal limits or within 8 kms of the municipal limits is to be treated as urban land and taxed in the hands of the assessee. Here the land may have been an agricultural land in assessment year 1984-85 but it does not mean that it will remain agricultural land for ever. 5. Apropos Ground No. 4 i.e. property situated at Plot No. 13 on New Station Road, Alwar is lying vacant and claimed by the the assessee as exempt residential property. The assessee neither resides in this property nor has rented out it after purchase. Recently, a commercial complex which is known as Data Arcade has been developed thereon. The property was purchased for commercial purposes and not for residential purposes. The ld. CWT(A) has wrongly applied the decision of Hon'ble Karnataka High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner property - This addition has been deleted by ITAT vide order dated 16- 11-2011 for the assessment years 1998-99 to 2002-03 in WTA No. 6 to 10/JP/2011 which has been followed by ITAT in its order 07-03-2012 at pages 9 10 in para 8 to 9. The same is reproduced as under. 8. Second issue is in respect to deleting the addition of wealth made on account of share in Krishna Mills, Alwar. 8.1. This issue has been discussed by the Tribunal in paras 4.1 to 4.8 at pages 12 to 16. The operative para of the order of Tribunal is para 4.8, which is reproduced as under :- 4.8 We have heard both the parties. It has been contended before the CWT that the assessee is not in possession of the Mill. Certain civil suits are going on in the Hon'ble High Court as well as in the lower Courts with regard to the ownership over the Mill. We have gone through the papers available in the paper book from pages 9 to 27 .There are civil suits. One of the petitioner has filed the affidavit on 15-07-2005 in the District Court, Alwar in which it has been stated that the property is owned by him. Thus the assessee is having a disputed right. It is not an asset in the form of urban land. We the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stands otherwise such property cant be acquired by the Govt. The daughters of the assessee are major and therefore, such property cannot be included in the Wealth of the assessee as there is no finding that assessee holds the land in benami name of his daughters. 15. Since facts are similar, therefore, we confirm the order of ld. CIT (A) for the year under consideration also. 9. Apropos Ground No. 4 i.e. property situated at Station Road Alwar, the Urban Improvement Trust gave the permission for conversion of this land from residential to commercial use on 23-01-2004. Thereafter, this land was contributed as capital contribution to M/s. Data Arcade on which construction of commercial complex was started in the name of M/s. Data Arcade. The land and construction thereon is accordingly reflected in the accounts of commercial venture as on valuation date i.e. 31-03-2004. Out of it, part of stock (shops) are sold and the remaining cost of land and building is shown as closing stock as on 31-03-2004. Thus when this land is contributed and dealt as trading stock and remainder stock is held as trading stock and building is constructed thereon. It falls outside the definition of Ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made and the case laws considered, it is held that the said property at Station Road Alwar was not taxable as urban land and further as a building it was exempt from Wealth Tax in view of provision of section 2(ea)(i)(5) of the WT Act. The AO has held in the assessment order that if the assessee has transferred the said property in their AOP status then the property is taxable as deemed asset as per section 4(l)(a)(iii) of the Act.. Since, the said property has been held to be not liable to wealth tax, as above, it can not be taxed as deemed asset as per section 4(1)(a)(iii) of the Act. Accordingly, the addition made of Rs. 2,74,26,025/- is deleted and this ground of appeal is allowed. It is pleaded that as on the valuation date, the property in question became the commercial complex which has not been disputed by the Department. The ld. CWT(A) has rightly held it to be not liable as deemed asset as per section 4(1)(a)(iii) of the Wealth Tax Act. 11. Apropos Ground No. 6 i.e. property at Nangli Khor, the ld. Counsel for the assessee contends that this property comprises of two pieces of land allotted by UIT in Scheme No 8, one plot no. 21 measuring 238.73 Sq. Yard an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per section 2(e) included property of every description, moveable or immovable, and this included even an interest in property. However, since 01.04.1993 the term asset has been defined in section 2(ea) to include only six items with necessary qualification i.e. (i) any building or land appurtenant thereto (ii) motor cars (iii) jewellery bullion, furniture etc. (iv) yacht, boats and air crafts (v) urban land and (vi) cash in hand. Further, the Act also .provides certain assets to be included in the net wealth of a person on deemed basis as per section 4 of the Wealth Tax Act. In this regard, it has been submitted by the AR that the said land can not be treated as a deemed asset of the appellant in view of the fact that the legal fiction created by section 4(8)(b) of the Act would apply only to a lease hold rights on a building and not to a lease hold right on land. The AR has relied the decision of Karnataka High Court in the case of Vysya Bank Limited, Vs. DCWT 299 ITR 335. After considering the provisions of the Act and the above said case cited by the AR, I am inclined to hold that the lease hold rights in the said land can not be brought to Wealth Tax even under the deemin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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