ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 2(4), AHMEDABAD, AHMEDABAD V. KADAVANTHARA BUILDERS PRIVATE LIMITED, AHMEDABAD

WTA 2/AHD/2026

AI Insights

The case involves three appeals filed by the Revenue against Kadavanthara Builders Private Limited concerning the assessment years 2013-14 to 2015-16. The core issue was the classification of certain lands owned by the assessee and whether they should be considered as 'urban land' under the Wealth Tax Act, 1957, which would make them taxable. The Assessing Officer had initially added these lands to the taxable net wealth of the assessee. However, the CIT(A) reversed this decision, citing that the lands were part of the stock-in-trade of the assessee's real estate business and thus excluded from the definition of 'urban land' for ten years from acquisition. The Tribunal supported the CIT(A)'s decision, referencing a prior ITAT order that had similar findings for subsequent assessment years.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 835339 (ITAT-AHMEDABAD)
• Duration Of Justice: 30 day(s)
• Appeal Type: Wealth Tax Appeal
• Pronouncement Date: 11-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 12-01-2026
• Other Referred Cases: ITA Nos. 2484 & 2485/CHNY/2019
• Laws Referred To: Wealth Tax Act, 1957
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Reassessment proceedings

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER WTA Nos.1 to 3/Ahd/2026 (Assessment Year: 2013-14 to 2015-16) Assistant Commissioner of Income-tax, Central Circle-2(4), Ahmedabad Vs. Kadavanthara Builders Private Limited, B.No. 33, Amrapalash, Near Amrasagun Bungalows, Ramdevnagar Road, Ahmedabad-380015 [PAN : AADCK 0128 R] (Appellant) .. (Respondent) Assessee represented by : Shri Karan R. Ranka, AR Revenue represented by: Shri Rignesh Das, CIT-DR Date of Hearing 10.02.2026 Date of Pronouncement 11.02.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT : These three appeals have been filed by the Revenue against the separate orders of the Ld. Commissioner of Income-tax (Appeals)-12, Ahmedabad (hereinafter referred to as \"CIT(A)\"), all dated 21.11.2025, in pursuance of the order passed by the Wealth Tax Officer, Ward 4(3)(3), Bengaluru u/s 16(3) r.w.s. 17 of the Wealth Tax Act, 1957 (hereinafter referred to as \"the Act\"), for the Assessment Years 2013-14 to 2015-16. 2. Since the issues involved in all these appeals are identical and arise from similar facts, these appeals were heard together and are disposed of by this consolidated order for the sake of convenience. 3. The Revenue has raised the following grounds of appeal in AY 2013-14:- Printed from counselvise.com WTA Nos. 1 to 3/Ahd/2026 - ACIT Vs. Kadavanthara Builders Pvt Ltd Asst. Year : 2013-14 to 2015-16 - 2– “1) \"In the facts and on the circumstances of the case and in law, the Learned CIT(A) has erred in deleting the addition made by the Assessing Officer to net wealth of the assessee on account of 'urban land' held by it covered under Section 2(ea) of the Wealth Tax Act, 1957\". 2) \"In the facts and on the circumstances of the case and in law, the Learned CIT(A) has erred in considering that the Siruseri lands constituted stock-in-trade/work-in- progress of the assessee's real estate business and thereby holding that the same was to be excluded from 'urban land' for 10 years from acquisition ignoring that the assessee itself had not shown the land as opening/closing stock/WIP in its P&L account.\" 3) \"In the facts and on the circumstances of the case and in law, the Learned CIT(A) has erred in relying upon the decisions Hon'ble ITAT in assessee's own case related to assessment years for AY's 2014-15 and 2015-16, without considering the specific facts, circumstances, and material evidence for the year under consideration.\" 4. In this case, the Assessing Officer had made an addition by treating the land as taxable under the Wealth Tax Act. The Ld. CIT(A) has deleted the addition based on the order of the ITAT (ITA Nos. 2484 & 2485/CHNY/2019 dated 12.05.2023), which treated the said land in question as stock-in-trade. For the sake of ready reference, the operative part of the order of the Ld. CIT(A) is reproduced as under:- “6.13 The Hon'ble ITAT has categorically held that the Appellant has continuously maintained the land as work-in-progress, has undertaken business activities including removal of high-tension wires and arrangement for road connectivity, and has at no point re-characterized the asset from current asset to capital asset. The ratio decidendi of the ITAT's order squarely demolishes the foundation of the Wealth Tax reassessment proceedings, which were entirely triggered on the basis that the land was treated as a capital asset in the Income Tax proceedings. Once the Income Tax Appellate Authority has concluded that the land is business inventory and not a capital asset, the Wealth Tax proceedings predicated on the contrary treatment lack any legal or factual foundation. 6.14 In view of the decision of the Hon'ble Income Tax Appellate Tribunal in the appellant's own case for Assessment Years 2014-15 and 2015-16, it Printed from counselvise.com WTA Nos. 1 to 3/Ahd/2026 - ACIT Vs. Kadavanthara Builders Pvt Ltd Asst. Year : 2013-14 to 2015-16 - 3– stands conclusively established that the land in question forms part of the stock-in-trade or work-in-progress of the appellant's real estate business and has never been re-characterized as a capital asset Further, the statutory exclusion under Section 2(ea) of the Wealth-tax Act clearly provides that land held as stock-in-trade for a period of ten years from the date of acquisition is excluded from the definition of \"urban land.\" Taking the earliest date of acquisition as the Financial Year 2007-08 (ie., April 2007), the ten-year exclusion period extends up to March 2017, corresponding to Assessment Year 2017-18. The Assessment Year under consideration, 2013- 14 therefore, falls well within this ten-year exclusion period. This exclusion is mandatory and absolute in its operation, leaving no scope for interpretational ambiguity. Accordingly, it is concluded that the Siruseri lands do not constitute \"assets\" within the meaning of Section 2(ea) of the Act for Assessment Year 2013-14. Therefore, computation of total wealth of the appellant of Rs. 193,81,48,451/- by treating such stock-in-trade as \"urban land\" u/s 2(ea) of the Act cannot be sustained in law and on facts is hereby deleted. Consequently the computation of wealth tax at Rs.1,93,51,484/- and the levy of interest thereon of Rs. 1,93,51,484/- u/s 17B of the Act are also deleted.” Since the order of the Ld. CIT(A) is based on the order of the ITAT, we decline to interfere with the order of the Ld. CIT(A). 5. Since the facts and issues involved in other two AYs, i.e. AY 2014-15 & AY 2015-16, are identical, the above directions shall apply mutatis mutandis to that years as well. 6. In the result, all the appeals of the Revenue are dismissed. The order is pronounced in the open Court on 11.02.2026 Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 11/02/2026 **btk Printed from counselvise.com WTA Nos. 1 to 3/Ahd/2026 - ACIT Vs. Kadavanthara Builders Pvt Ltd Asst. Year : 2013-14 to 2015-16 - 4– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation ………. 10.02.2026….. 2. Date on which the typed draft is placed before the Dictating Member …….10.02.2026….. 3. Other Member……….10.02.2026………… 4. Date on which the approved draft comes to the Sr.P.S./P.S ……..10.02.2026….………. 5. Date on which the fair order is placed before the Dictating Member for pronouncement ……11.02.2026…. 6. Date on which the fair order comes back to the Sr.P.S./P.S ……11..02.2026………………. 7. Date on which the file goes to the Bench Clerk ……11.02.2026…. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "