A VISHNU MURTHY,SRIKAKULAM V. WTO, WARD-1, SRIKAKULAM

WTA 7/VIZ/2022

AI Insights

The case involves multiple appeals filed by A.V. Lakshmana Rao (HUF) and other family members against the orders of the Commissioner of Wealth Tax (Appeals) regarding the assessment years 2001-02, 2002-03, 2003-04, 2009-10, 2010-11, and 2011-12. The primary issue was the classification of certain urban lands as agricultural, which would exempt them from wealth tax. The AO had initially rejected the agricultural claim due to lack of evidence of agricultural activities, leading to higher wealth tax assessments. The Tribunal, after considering the evidences and the CBDT Circular No.11/2015, directed a reassessment to determine the agricultural status of the lands based on the new evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360691 (ITAT-VISAKHAPATNAM)
• Appeal Type: Wealth Tax Appeal
• Pronouncement Date: 20-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2010-2011
• Laws Referred To: Wealth Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Assessee Lawyers: Y.A.RAO
• Keywords: Opportunity of being heard; Additional evidence; Retrospective amendment; Principle of natural justice

Judgement Text

"आयकर अपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “DIVN” BENCH, VISAKHAPATNAM श्री धिजय पाल राि, उपाध्यक्ष एिं श्री एस बालाकृष्णन, लेखा सदस्य के समक्ष BEFORE SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER W.T.A.No.5/Viz/2019 to 8/Viz/2019 & 1/Viz/2022 to 02/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2001-02, 2002-03, 2003-04, 2009-10, 2010-11 & 2011-12 respectively) A.V. Lakshmana Rao (HUF) Srikakulam [PAN : AAIHA8041B] Vs . Wealth Tax Officer Ward-1 Srikakulam (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) W.T.A.No.3 & 4/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2010-11 & 2011-12) Andhavarapu Uma Shanker, S/o. Late A Venkata Mutayalu, Gujarathipeta Post, Srikakulam – 532005. [PAN: AAAHU5976P] Vs . Wealth Tax Officer Ward-1 Srikakulam (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) W.T.A.No.5 & 6/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2011-12 & 2010-11) Andhavarapu Ramalingam, S/o. Late A. Venkata Mutayalu, TN Colony, 2nd Lane, Gujarathipeta Post, Srikakulam – 532005. [PAN: AISPA9487H] Vs. Wealth Tax Officer Ward-1 Srikakulam (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) 2 W.T.A.No.7/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2010-11) Andhavarapu Vishnu Murthy, S/o. Late A. Venkata Mutayalu, Gujarathipeta Post, Srikakulam-532005. [PAN: AAJHA2770E] Vs. Wealth Tax Officer Ward-1 Srikakulam (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थी की ओर से/ Appellant by : Shri Y.A. Rao, CA प्रत्यधर्थी की ओर से / Respondent by : Dr. Aparna Villuri, Sr. AR सुिवधई की तधरीख / Date of Hearing : 28/04/2025 घोर्णध की तधरीख/Date of Pronouncement : 20/05/2025 आदेश /O R D E R Per Bench : The captioned appeals are filed by the assessees against the orders of Commissioner of Wealth Tax (Appeals) [CWT(A)]-9 and Ld. CWT(A)-11, Hyderabad and the details are as under: Sl no Name of the assessee and WTA No. and AYs CWT(A), ITA No. Date of CWT(A) order 1. A.V.Lakshmana Rao (HUF) 5/Viz/2019 to 8/Viz/2019 (2001-02, 2002-03, 2003-04, 2009-10) 10447 to 10449/CWT(A)-9, Hyd/2017-18 and 10201/CIT(A)-9 Hyd/2017-18 08/03/2019 2. A.V.Lakshmana Rao (HUF) 1/Viz/2022 to 02/Viz/2022 (2010-11 & 2011-12) CWT(A)-11, Hyd, ITA No. 10331 & 10332/2018- 19/CWT(A)-11 14/02/2022 3. A. Uma Shanker W.T.A.No.3 & 4/Viz/2022 (2010-11 & 2011-12) CWT(A)-11, ITA NO. 10333 & 10334/2018- 19/CWT(A)-11 14/02/2022 4. A. Ramalingam CWT(A)-11, Hyd ITA 14/02/2022 3 W.T.A.No.5 & 6/Viz/2022 (2011-12 & 2010-11) No. 10337 & 10338/2018- 19/CWT(A)-11 5. A. Vishnu Murthy W.T.A. No. 07/Viz/2022 (2010-11) CWT(A)-11, Hyd ITA No. 10330/2018- 19/CWT(A)-11 14/02/2022 Since the grounds raised in all these appeals are identical, these appeals are clubbed, heard together and a consolidated order is being passed for the sake of convenience as under and the facts are extracted from W.T.A.No.05/Viz/2019. W.T.A.No.05/Viz/2019 to 08/Viz/2019 A.Y. 2001-02, 2002-03, 2003-04 & 2009-10 2. Brief facts of the case are that the assessee in the status of Hindu Divided Family (HUF), filed it’s returns of wealth for the A.Ys 2001-02, 2002-03, 2003-04 and 2009-10, admitting net wealth of Rs.12,30,093/-, Rs.13,56,529/-, Rs.14,18,937/- and Rs.5,65,955/- respectively. The joint family of late Sri Andhavarapu Venkata Mutyalu consists of Sri Andhavarapu Venkata Lakshmana Rao, Smt. Andhavarapu Sulochana, Sri Andhavarapu Ramalingam, Sri Andhavarapu Umashankar, Sri Andhavarapu Nagaraju, Sri Andhavarapu Venugopal, Sri Andhavarapu Suryanarayana, Sri Andhavarapu Vishnu Murty and Smt. Andhavarapu Ramanamma. Sri Andhavarapu Venkata Mutyalu died in the year 1988 and the said HUF had effected partial partition of their movable assets in the year 1991 and further partitioned their immovable assets valued at 4 Rs.2,11,42,000/- on 03.05.2003 amongst the above 9 groups of members. The assessee got the immovable properties in the form of urban vacant plots, which stood at Rs.1,17,84,549/-, as per the valuation of the Registration Department of A.P. State Government as on the valuation date relevant to the A.Y.2001-02. The assessee claimed the land as agricultural land, though, it is situated in urban area. The Assessing Officer (AO) issued notices u/s 16(2) and 16(4) of Wealth Tax Act (in short ‘Act’) requiring the assessee to furnish evidence in support of his claim of agricultural land i.e. survey no. extent of land, nature of crops grown, name of the party to whom the agricultural produce was sold, date of sale and amount of sale proceeds received. The assessee was also requested to furnish the details regarding sale of plots i.e. extent of each plot, no.of plots sold, name and address of the party to whom sold, date of sale and amount received for each plot. But the assessee has not furnished any evidence that it had carried out agricultural operations and has also not submitted any details like nature of crops grown, name of the party to whom agricultural produce was sold, date of sale and the amount of sale proceeds received. Hence, the AO construed the lands as non agricultural lands as the assessee did not carry out any agricultural activities in the said urban land. The assessee himself had converted the land into layout bits and sold them in 5 terms of square yards. The AO held that the intention of the assessee is to sell the land for commercial / residential purposes, but not for agricultural purposes and it looses the character of agricultural land as the plotting was done by the assessee and was sold in the form of lay out bits ranging from 165 sq.yards to 220 sq.yards. Hence, the AO completed the assessments for the A.Ys. 2001-02, 2002-03, 2003-04 and 2009-10 determining the Net Wealth of Rs.1,74,95,178/-, Rs.1,75,55,586/- Rs.1,23,39,642/- and Rs.87,43,518/- respectively. 3. On being aggrieved by the order of the Ld. AO, the assessee preferred appeal before the Ld. CWT(A) and the Ld.CWT(A) partly allowed the appeal of the assessee by observing as under: “5.3. In view of the report of the Assessing Officer, appellant is entitled to part relief, however, the observation of the Hon’ble Supreme Court is too crucial that the appellant has to substantiate its case, that not only the lands were agricultural but operations were also conducted. If the appellant has claimed agricultural income in these years in the income tax records, then Assessing Officer may allow the relief after verification.” 4. Aggrieved by the order of the Ld. CWT(A) the assessee preferred appeal before the Tribunal. At the outset, the contention of the Ld.AR is that it is third round of litigation. The Ld. AR submitted that the Tribunal vide it’s order in WTA Nos 1 to 27/Viz/2010 dated 18.01.2011 gave directions to the AO to make reassessments after taking consideration of the evidences produced by the assessee. But 6 the Assessing Officer (AO) without making enquiries and without proper examination completed the assessment u/s 16(3) r.w.s. 24 of Wealth Tax Act on 23.12.2011. On this aspect, the contention of the assessee is that the AO failed to consider the documentary evidences produced in support of the claim of the assessee that the lands covered by Survey Nos.130, 144 & 147 in Gujarathipeta are cultivating lands and further failed to verify whether agricultural operations are taking place or not by making proper enquiries. Therefore, he pleaded that the Ld. AO failed to ascertain the character of the land situated in Survey Nos. 136/6, 130 part, 136/9G, 167/5, 170/2, 154/1, 136/2 and 100/3 whether it has been converted into non-agricultural lands. He further submitted that the remand report of the Ld. AO is silent on the character of the land situated in the above cited Survey Nos. The Ld. AO has submitted remand report only with respect to the Survey No.144 without ascertaining the character of the lands situated in the above said Survey Nos. The Ld. AR therefore pleaded to set-aside the order of the Ld. CWT(A) by providing one more opportunity to submit the documents before the Ld. AO for verification of the character of the land situated in Survey Nos. 136/6, 130 part, 136/9G, 167/5, 170/2, 154/1, 136/2 and 100/3. He further submitted that the Pattadar Pass Book and the Certificate from the Village Revenue 7 Officer (VRO) with respect to the above mentioned Survey Nos were produced before the Tribunal and therefore, the Ld. AO may be directed to verify the same with respect to the classification of land as agricultural lands. 5. On the other hand, the Ld. DR submitted that the assessee has not established that the land is an agricultural land. The Tribunal has remitted the matter back to file of the AO. It is the responsibility of the assessee to furnish credible documents to claim that the land is urban, but utilized for agricultural purposes. He further submitted that before the Ld. CWT(A) also, the assessee has not furnished the documents. The assessee relied on CBDT Circular No.11 dated 11.06.2015, wherein, it is mentioned that if any assessee has paid the wealth tax for the period prior to the date of retrospective amendment, the assessee may apply to PCWT within one year from the date of issue of the order for refund of wealth tax if any paid. However, in the first paragraph of the CBDT Circular (supra) it is clarified that the position prior to amendment by Finance Act, 2013 as “urban land would not include the land classified as agricultural land in the records of the government and used for agricultural purposes”. The assessee has submitted the copy of remand report submitted before the Commissioner of Income Tax 8 (A)-2, Visakhapatnam on 20.06.2016, where the AO has stated as under : “In this regard, it is submitted that the revenue record at the office of the VRO, Gujaratipeta, Srikakulam were verified by the Inspector of this office and obtained the relevant copies of Adangal / Pahani register which are enclosed herewith for your kind perusal of the Commissioner of Income Tax (A)-2, Vsp. As per the said revenue record, agricultural activities were carried in the said lands in Sy.No.144-1A, 144-1C, 144-1D, 144-2b, 144- 2B1 and 144-3A in the F.Ys. 2009-10 and 2010-11. Thus, CBDT Circular No.11/2015 dated 11.06.2015 applies in the case of assessee, to the extent of the above lands, where agricultural activities were carried and as per the State Government Revenue records. Therefore, the additional evidence produced by the Commissioner of Income Tax (A)-2, Vsp, may be admitted. The annexures attached with this report are in Telugu.” After considering the observations of the Ld. AO vide remand report, the appeal was partly allowed by the Ld. CWT(A). The Ld. DR pleaded to uphold the order passed by the Ld. CWT(A) and dismiss the appeals of the assessee. 6. We have heard both the sides and perused the material available on record. The only issue involved in this appeal is whether the impugned land is agricultural land to allow exemption or not eligible to claim exemption. It is an undisputed fact that this Tribunal has remanded the matter back to the file of the AO vide it’s order in W.T.A.No.s1 to 27/Viz/2010 dated 18.01.2011 with a direction to the AO to make assessments after considering the evidences produced by the assessee. After considering the evidences filed by the assessee, the Ld.AO observed that revenue records of 9 office of VRO, Gujarathipeta, Srikakulam state that agricultural activities were carried out in the said lands in Sy.No. .144-1A, 144- 1C, 144-1D, 144-2b, 144-2B1 and 144-3A in the F.Ys. 2009-10 and 2010-11. Based on the remand report given by the WTO and by relying on the Circular No.11/2015 dated 11.06.2015, the Ld.CWT(A) considered to the extent of above lands are agricultural lands and accordingly held as under: “In view of the report of the AO, the appellant is entitled to part relief, however, the observation of the Hon’ble Supreme Court is too crucial, that the appellant has to substantiate it’s case, that not only the lands were agricultural but agricultural operations were also conducted. If the appellant has claimed agricultural income in these years in the Income Tax records, then the AO may allow the relief after verification and thus, partly allowed the appeals.” Considering the prayer of the Ld. AR consequent to submission of receipt for payment of land revenue and a Certificate from the VRO stating that the agricultural operations were carried on by the assessee in the Survey No. 136/6, 130 part, 136/9G, 167/5, 170/2, 154/1, 136/2 and 100/3, following the principles of natural justice, we consider it deem fit to remit the matter back to the file of the Ld. AO with a direction to the Ld. AO to make the assessment afresh after considering the additional evidences produced by the assessee before the Tribunal with regard to Survey Nos. 136/6, 130 part, 136/9G, 167/5, 170/2, 154/1, 136/2 and 100/3 and also by considering the Circular No. 11/2015 dated 11/06/2015 while deciding the issue. Needless to mention that the assessee should be 10 given a reasonable opportunity of being heard and to file the relevant documentary evidence before the Ld AO. The assessee is also directed to provide the relevant documents before the Ld AO substantiating the claim of agricultural land without seeking unnecessary adjournments, otherwise the Ld. AO is at liberty to decide the issue on merits in accordance with law based on the material available on record. Accordingly, the grounds raised by the assessee in these appeals are allowed for statistical purposes. W.T.A.No.01/Viz/2022 & 02/Viz/2022, A.Y.2010-11 & 2011-12 7. In these appeals, the assessee has raised the identical issues with that of the issues raised in the appeals in W.T.A.No.5/Viz/2019 to 8/Viz/2019. While adjudicating these appeals in the aforesaid paras of this order, we have remitted the matter back to the file of the Ld. AO with a direction to the Ld. AO to make the assessment afresh after considering the additional evidences produced by the assessee before the Tribunal. Therefore, considering the similarity of the issues involved, out decision given in W.T.A.No.5/Viz/2019 to 8/Viz/2019 mutatis mutandis applies to the W.T.A Nos. 1/Viz/2022 to 02/Viz/2022 also. Accordingly, these appeals are allowed for statistical purposes. 11 8. In the result, all the six appeals filed by the assessee in the case of A.V. Lakshmana Rao (HUF) are allowed for statistical purposes. W.T.A.No.3 & 4/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2010-11 & 2011-12) (Andhavarapu Uma Shanker) W.T.A.No.5 & 6/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2011-12 & 2010-11) (Andhavarapu Ramalingam) W.T.A.No.7/Viz/2022 (निर्धारण वर्ा / Assessment Year : 2010-11) (Andhavarapu Vishnu Murthy) 9. In all these appeals, the facts of the cases and the grounds raised by the assessees are identical to that of the facts and the grounds of appeal raised by the assessee in the case of A.V. Lakshmana Rao (HUF) which is adjudicated in the aforesaid paragraphs of this order. In these appeals in the case of Andhavarapu Uma Shanker, Andhavarapu Ramalingam and Andhavarapu Vishnu Murthy the assessees have received immovable properties due to partition of the HUF. The only issue involved in all these appeals is with respect to the treatment of agricultural land as mentioned in Survey Nos. 136/6, 130 part, 136/9G, 167/5, 170/2, 154/1, 136/2 and 100/3 are agricultural lands or non-agricultural lands. Since this core issue is identical to 12 that of the issue raised by the assessee in the case of A.V. Lakshmana Rao (HUF) which is adjudicated in the aforesaid paragraphs of this order, the view taken by us in para No.6 while adjudicating the appeal in the case of A.V. Lakshmana Rao (HUF) shall mutatis mutandis applies to the appeals in the case of Andhavarapu Uma Shanker, Andhavarapu Ramalingam and Andhavarapu Vishnu Murthy also. Thus, all these appeals are allowed for statistical purposes. 10. In the result, appeals filed by the assessees in the case of Andhavarapu Uma Shanker, Andhavarapu Ramalingam and Andhavarapu Vishnu Murthy are allowed for statistical purposes. 11. Ex-consequenti, all the appeals filed by the assessees are allowed for statistical purposes. Pronounced in the open Court on 20th May, 2025. Sd/- Sd/- (VIJAY PAL RAO) (S. BALAKRISHNAN) उपाध्यक्ष/VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER Dated :20/05/2025 OKK-SPS 13 आदेश की प्रधिधलधप अग्रेधिि/Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee– (i) Shri A.V.Lakshmana Rao (HUF), S/o Late A. Venkata Mutyalu, TN Colony, 2nd Lane, AGM Nagar, Plot No.72, Gujarathipeta Post, Srikakulam. (ii) Andhavarapu Uma Shanker, S/o. Late A Venkata Mutayalu, Gujarathipeta Post, Srikakulam – 532005. (iii) Andhavarapu Ramalingam, S/o. Late A. Venkata Mutayalu, TN Colony, 2nd Lane, Gujarathipeta Post, Srikakulam – 532005. (iv) Andhavarapu Vishnu Murthy, S/o. Late A. Venkata Mutayalu, Gujarathipeta Post, Srikakulam-532005. 2. रधजस्व/The Revenue –Wealth Tax Officer, Ward-1, Srikakulam 3. The Principal Commissioner of Income Tax, 4. नवभधगीय प्रनतनिनर्, आयकर अपीलीय अनर्करण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5. गधर्ा फ़धईल / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "