Suchitra Kamble ORDER
Suchitra Kamble, Member (J)
1. This Wealth Tax Appeal is filed by the assessee against the order dated 17.07.2019 passed by the CIT(A)-5, Ahmedabad for the Assessment Year 2010-11.
2. The assessee has raised the following grounds of appeal:
"1.1. The order passed u/s.16(3) r.w.s. 17 on 18.12.2015 for A.Y. 2010-11 by WTO, Ward-5(2)(2), Ahmedabad making addition aggregating to Rs. 2,12,98,200/-treating lands at Vastrapur and Rancharda as urban lands is passed without observing the principles of natural justice and therefore, is wholly illegal, unlawful and invalid.
1.2 The Ld. AO has grievously erred in passing the order without considering fully and properly the explanations furnished and evidences produced by the appellant.
1.3 The Ld. AO has grossly erred in making addition without passing a speaking and reasoned order. The appellant should therefore be allowed to produce additional evidence during the course of appellate proceedings and should be admitted.
2. The Ld. AO has grossly erred in law and on facts on holding agricultural lands at Vastrapur and Rancharda as urban land u/s. 2(ea)(v) of WT Act and thereby making addition of Rs. 2,12,98,200/-. The Ld. CIT(A) ought to have considered the fact that the urban land at Vastrapur and Rancharda is an agricultural land as per the records of Government and is used for agricultural purposes. The Ld. CIT(A) ought to have taken into consideration amendment brought in by Fianc Act, 2013 w.e.f. 01.04.1993 wherein sub-clause(b) of Explanation-I to clause (ea) was amended to provide that the term "urban land" would not include land classified as agricultural land in the records of Government and used for agricultural purposes. The Ld. AO ought to have considered that relying upon the above amendment and CBDT Circular No. 11/2015 : MANU/DTCR/0019/2015 dated 11.06.2015 (F. No. 325/02/2014-WT), the appellant has not disclosed the above-mentioned land as "wealth" and did not offer it for tax. It so be held now.
3. Levy of interest and intimation of penalty proceedings u/s.18 of the W.T. Act, 1957 is not justified."
3. The assessee is an individual derives income by way of rent, interest and agriculture etc. The assessee filed return of net wealth for A.Y. 2010-11 on 25.03.2011 declaring net wealth of Rs. 1,39,11,000/-. The Assessing Officer observed that the assessee had not included the urban land cost of Rs. 2,12,98,200/-and cash in hand of Rs. 1,25,400/-after exemption of Rs. 50,000/-for wealth chargeable to Wealth Tax. The Assessing Officer observed that the assessee had understated the wealth by treating the land at Vastrapur and Rancharda as non-urban land. The notice under Section 17 of the Wealth Tax Act was issued on 28.10.2013. The assessment was reopened after recording reasons as per the observations of the Assessing Officer. The assessee could not submit his objection to the validity of reopening as reasons recorded for reopening were not furnished to the assessee as per the contentions of the assessee. During the course of assessment proceedings, the assessee submitted that both the said lands were non-urban land and as such exempt under Section 2(ea)(v) of Wealth Tax Act. The Assessing Officer concluded that the said lands were urban land and as such its value aggregating to Rs. 2,12,98,200/-was brought to tax.
4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A)dismissed the appeal of the assessee.
5. The Ld. AR submitted that the land situated at Vastrapur and Rancharda were non-urban land and the assessee has given all the evidences before the Assessing Officer which were ignored by the Assessing Officer as well as the CIT(A). The Ld. A.R. further submitted that the reopening itself is bad in law as the reasons were not supplied to the assessee despite request made to the Assessing Officer. Ld. AR further submitted that the assessee has filed return of wealth on 25.03.2011 declaring total wealth at Rs. 1,39,74,700/-. The Ld. AR further submitted that by Finance Act, 2013 the sub-clause (b) to Explanation-1 to clause (ea) to Section-2 was amended to provide that the term urban land would not include land classification as agricultural land in the records of the Government and used for agricultural purpose. Accordingly, such land stand exempt from Wealth Tax and this amendment was made with retrospective effect from 01.04.1993. The Ld. AR also relied upon the CBDT Circular No. 11/2015 : MANU/DTCR/0019/2015 dated 11.06.2015. Ld. AR submitted that the Circular clarifies that the land should be categorically agricultural land used for agricultural purpose also.
6. The Ld. DR relied upon the assessment order and the order of the CIT(A).
7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the said land and the details given by the assessee before us were only related to Talati Certificate which is undated. The other documents which were before us and before the CIT(A), as contended by the assessee, are not showing that the said land were not coming under the urban land definition. Ld. AR further contended that the reasons were not supplied to the assessee by reopening the case but since the very basis of reopening was related to the urban land, the assessee was very much aware about the reasons upon which the reopening was made by the Revenue Authorities. Thus, the reopening is valid which is also reiterated by the CIT(A) in paragraph no. 4.4 of the order of the CIT(A). Hence ground nos. 1.1, 1.2 & 1.3 are dismissed.
8. As regards ground no. 2 related to the merits, it is seen that the lands at Vastrapur and Rancharda were coming under the definition of urban land under section 2(ea)(v) of the Wealth Tax Act as the documents which were produced before the Revenue Authorities and before us clearly does not state that this are agricultural land. The assessee contended that these are agricultural land as per the records of the Government but only document which was on record is related to Talati Certificate which is undated and is not specifying the period of agricultural activity or not specifying the agricultural produce on the said land. Whether any land comes under the urban land or agricultural land, the certificate from Collector should have been placed by the assessee but since the assessee failed to do so it is clear that the said land is urban land and, therefore, the Assessing Officer rightly made wealth tax addition towards both of these lands. Ground no. 2 is dismissed.
9. In the result, appeal of the assessee is dismissed.
Order pronounced in the open Court on this 27th day of July, 2022.
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