Sri. M.R.Prabhavathy, Bangalore V. Assistant Commissioner of Wealth-tax, Central Circle - 1(2), Bangalore

CO 36/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5759 (ITAT-BANGALORE)
• Duration Of Justice: 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 07-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Retrospective amendment
• Section: 2(14); 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N. V. VASUDEVAN, VICE PRESIDENT AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER W TA NO S . 07 AND 08 / BANG /201 9 ASSESSMENT YEAR S : 20 0 7 - 08 AND 2009 - 10 THE ASSISTANT COMMISSIONER OF WEALTH-TAX, CENTRAL CIRCLE 1(2), BANGALORE. VS. SMT. M. R. PRABHAVATHY, 1, GOKULA HOUSE, GOKULA MATHIKERE, BANGALORE 560 054. PAN : ACZPP 0933 A APPELLANT RESPONDENT C.O. NOS. 36 & 37/BANG/2019 (IN WTA NO S .07 AND 08 /BANG/2019 ) ASSESSMENT YEAR S : 2007 - 08 AND 2009 - 10 SMT. M. R. PRABHAVATHY, 1, GOKULA HOUSE, GOKULA MATHIKERE, BANGALORE 560 054. PAN : ACZPP 0933 A VS. THE ASSISTANT COMMISSIONER OF WEALTH-TAX, CENTRAL CIRCLE 1(2), BANGALORE. APPELLANT RESPONDENT REVENUE BY : SHRI. PRADEEP KUMAR, CIT ASSESSEE BY : SHRI. PRANAV KRISHNA, ADVOCATE DATE OF HEARING : 08.05.2019 DATE OF PRONOUNCEMENT : 10 .05.2019 O R D E R PER BENCH THESE ARE TWO APPEALS BY REVENUE DIRECTED AGAINST THE ORDERS OF THE COMMISSIONER OF WEALTH-TAX (APPEALS)-6. BENGALURU, BOTH DATED 22/11/2018 WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 2 OF 11 FOR ASSESSMENT YEARS 2007-08 AND 2009-10. THE ASSESSEE HAS ALSO FILED CROSS- OBJECTIONS IN RESPECT OF THE AFORESAID ORDERS OF THE LD.CIT(A). SINCE COMMON ISSUES ARE INVOLVED, THESE APPEALS WERE HEARD TOGETHER AND WE DEEM IT APPROPRIATE TO DISPOSE THEM OFF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED, THE RELEVANT FACTS OF THE CASE ARE AS UNDER:- 2.1 THE ASSESSEE FILED RETURNS OF NET WEALTH FOR ASSESSMENT YEAR 2007-08 ON 31/3/2008 AND FOR ASSESSMENT YEAR 2009-10 ON 31.03.2010. IT WAS NOTICED THAT THE ASSESSEE, WHO OWNED 58 ACRES AND 28 GUNTAS OF LANDS AT AKKELENAHALLI -MALLENAHALLI VILLAGE, HAD NOT INCLUDED THE VALUE OF THIS LAND IN HER RETURNS OF NET WEALTH. CONSEQUENTLY, THE ASSESSING OFFICER (AO) INITIATED PROCEEDINGS AND ISSUED NOTICE U/S 17 OF THE WEALTH-TAX ACT,1957 (IN SHORT 'THE ACT') FOR RE-OPENING THE ASSESSMENTS IN THIS CASE. IN RESPONSE THERETO, THE ASSESSEE REQUESTED THE AO TO TREAT THE ORIGINAL RETURNS OF NET WEALTH AS FILED IN COMPLIANCE TO THE NOTICE U/S 17 OF THE ACT. THE ASSESSEE ALSO REQUESTED THE AO TO PROVIDE HER WITH COPY OF THE REASONS RECORDED FOR RE-OPENING HER CASE AND THE SAME WAS PROVIDED TO HER BY THE AO. THE ASSESSEE FILED HER OBJECTIONS IN RESPECT OF THE REASONS RECORDED FOR INITIATION OF PROCEEDINGS U/S 17 OF THE ACT AND THE AO DISPOSED OFF THE SAME BY WAY OF PASSING A SPEAKING ORDER THEREON. 2.2 IN HER SUBMISSIONS, THE ASSESSEE HAD STATED THAT THE SAID LANDS SITUATED AT AKKELENAHALLI-MALLENAHALLI VILLAGES DOES NOT COME UNDER THE AMBIT OF THE DEFINITION OF WEALTH AS PER EXPLANATION 1(B) TO SECTION 2(EA) OF THE ACT WHICH DEFINES 'URBAN LAND', AS IT IS SITUATED 11 KMS AWAY FROM BBMP LIMITS. THE AO, AFTER CONSIDERING THE ASSESSEES SUBMISSIONS CONCLUDED THE ORDERS OF ASSESSMENT HOLDING THAT THE LAND IS SITUATED WITHIN 8 KMS FROM THE BBMP LIMITS IN STRAIGHT LINE METHOD AND FURTHER HELD THAT THE SAID LAND FALLS WITHIN WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 3 OF 11 THE JURISDICTION OF THE NEWLY CREATED ADMINISTRATIVE AUTHORITY, I.E. BIAPPA. THE AO ALSO HELD THAT BIAPPA IS AN AUTHORITY AKIN TO A MUNICIPALITY OR CANTONMENT BOARD, WHICH HAS ALL THE POWER ASSIGNED TO ANY LOCAL ADMINISTRATIVE AUTHORITY AND THEREFORE SHOULD ALSO BE CONSIDERED TO BE MUNICIPALITY FOR THE PURPOSES OF TAX ADMINISTRATION. IN THAT VIEW OF THE MATTER THE AO BROUGHT THE AFORESAID LANDS SITUATED AT AKKELENAHALLI- MALLENAHALLI VILLAGES UNDER THE AMBIT OF WEALTH AND ADOPTING THE GUIDELINE VALUE OF THE LANDS, BROUGHT THE SAME TO TAX UNDER THE ACT. THE ASSESSMENTS WERE ACCORDINGLY COMPLETED U/S 16(3) R.W.S. 17 OF THE ACT VIDE ORDERS DATED 31/3/2015 FOR ASSESSMENT YEARS 2007-08 AND ORDER DATED 05.12.2016 FOR ASSESSMENT YEAR 2009-10. 2.3 AGGRIEVED BY THE ORDERS OF ASSESSMENT DATED 31/03/2015 FOR ASSESSMENT YEAR 2007-08 AND DATED 05.12.2016 FOR ASSESSMENT YEAR 2009-10. THE ASSESSEE FILED APPEALS BEFORE THE CIT(A)-6, BENGALURU, WHO ALLOWED THE ASSESSEES' APPEALS ON MERITS VIDE SEPARATE ORDERS DATED 22/11/2018, FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF ITAT, BENGALURU IN THE CASE OF M. R. PADMAVATHY TRUST AND M R. JANAKIRAM (HUF) FOR ASSESSMENT YEAR 2007-08 IN WTA NO.242/BANG/2017 AND WTA NO.29/BANG/2017 DATED 17/08/2018 RESPECTIVELY. 3.1 REVENUE, BEING AGGRIEVED BY THE SEPARATE ORDERS OF THE CIT(A) DATED 22/11/2018 FOR ASSESSMENT YEARS 2007-08 AND 2009-10 IN THE CASE ON HAND, HAS FILED THESE APPEALS BEFORE THE TRIBUNAL. THE ASSESSEE TOO HAD FILED CROSS OBJECTIONS CHALLENGING THE VALIDITY OF RE-OPENING THE ASSESSMENTS OF WEALTH. 3.2 REVENUE HAS RAISED ALMOST IDENTICAL GROUNDS OF APPEAL IN THE CASE ON HAND AND WE, THEREFORE, EXTRACT HEREUNDER THE GROUNDS RAISED IN THE APPEAL FOR ASSESSMENT YEAR 2009-10:- WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 4 OF 11 1. WHETHER IN FACTS AND CIRCUMSTANCES OF THE CASE, THE CWT(A) ERRED IN DELETING THE ADDITION OF RS.29,25,00,000/- MADE ON THE BASIS OF GUIDELINE VALUE OF THE LAND AND HOLDING THE LAND TO BE URBAN LAND? 2. THE CWT(A) FAILED TO APPRECIATE THE FACT THAT THE DECISION OF CO-ORDINATE BENCH OF BANGALORE TRIBUNAL IN WTA 16 TO 29/BANG/2014 DATED 31.03.2015 AND THE DECISION IN THE CASE OF MR SEETHARAM IN ITA NO. 1654/BANG/2012 RELIED UPON BY THE CIT(A) HAVE NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL U/S.260A IS PENDING BEFORE HON'BLE KARNATAKA HIGH COURT. 3.3 THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ALMOST IDENTICAL GROUNDS IN ITS CROSS OBJECTIONS IN BOTH CASES, EXCEPT FOR FIGURES MENTIONED THEREIN AND WE THEREFORE EXTRACT HEREUNDER THE GROUNDS OF APPEAL RAISED IN THE ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10: 1. THE ORDER OF THE LEARNED COMMISSIONER OF WEALTH-TAX [APPEALS], IN SO FAR AS IT IS AGAINST THE RESPONDENT / CROSS OBJECTOR IS OPPOSED TO LAW, FACTS, EQUITY, AND WEIGHT OF EVIDENCE AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF WEALTH- TAX [APPEALS] IN SO FAR AS REGARD TO THE RELIEF GRANTED TO THE RESPONDENT/ CROSS - OBJECTOR, IS JUST AND PROPER AND DOES NOT REQUIRE ANY MODIFICATIONS, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER OF WEALTH- TAX [APPEALS] FAILED TO APPRECIATE, THAT THE ORDER OF ASSESSMENT OF WEALTH IS BAD IN LAW AND VOID-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION UNDER SECTION 17 OF THE WEALTH TAX ACT DID NOT EXIST AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, THE ASSESSMENT REQUIRES TO BE CANCELLED. 4. THE LEARNED COMMISSIONER OF WEALTH- TAX [APPEALS] OUGHT TO HAVE APPRECIATED THAT THE NOTICE FOR RE-OPENING ITSELF IS BAD IN LAW ON THE GROUND THAT THE NOTICE DOES NOT CORRECTLY INDICATE WHETHER THE ASSESSING OFFICER PROPOSES TO ASSESS OR REASSESS THE WEALTH OF THE RESPONDENT CROSS OBJECTOR ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WITHOUT PREJUDICE, LEARNED COMMISSIONER OF WEALTH- TAX [APPEALS] OUGHT TO HAVE APPRECIATED THAT ALLEGED REASONS RECORDED FOR REOPENING THE ASSESSMENT OF THE RESPONDENT DOES NOT CONSTITUTE REASONS TO BELIEVE, AND ARE UTMOST REASONS SUSPECT AND HENCE, THE NOTICE U/S. 17 IS BAD IN LAW ON THE FACTS AND RE CIRCUMSTANCES OF THE CASE. WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 5 OF 11 6. WITHOUT PREJUDICE, THE RESPONDENT / CROSS OBJECTOR OBJECTS THAT THE ORDER OF ASSESSMENT IS BAD IN LAW AS THE LEARNED ASSESSING OFFICER ERRED IN NOT DISPOSING T-E OBJECTIONS OF THE RESPONDENT IN RESPECT OF THE REASONS RECORDED FOR INITIATING PROCEEDINGS U/S. 17 VIDE A SEPARATE SPEAKING ORDER BEFORE CONCLUDING THE ASSESSMENT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE, THE RESPONDENT / CROSS OBJECTOR DENIES ITSELF LIABLE TO BE ASSESSED OVER AND ABOVE THE RETURNED NET WEALTH BY THE RESPONDENT / CROSS OBJECTOR OF RS. 4,80,41,300/- ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE RESPONDENT / CROSS OBJECTOR CRAVES LEAVE OF THIS HON'BLE TRIBUNAL TO AT: ALTER, DELETE, SUBSTITUTE OR MODIFY ANY OF THE GROUNDS URGED ABOVE. 9. IN THE VIEW OF THE ABOVE AND OTHER SUCH GROUNDS THAT MAY BE URGED AT THE TIME & THE HEARING OF THE APPEAL, THE RESPONDENT/ CROSS OBJECTOR PRAYS THAT THE APPEAL FILED BY THE REVENUE MAY BE DISMISSED AND THE CROSS OBJECTION FILED BY THE RESPONDENT/ CROSS OBJECTOR MAY KINDLY BE ALLOWED FOR THE ADVANCEMENT OF SUBSTANTIAL CAUSE OF JUSTICE. REVENUE'S APPEALS FOR ASSESSMENT YEARS 2007-08 AND 2009-10 IN ITA NOS.7 & 8/BANG/2019 4. GROUND NOS.1 AND 2 4.1 THE LD. CIT-DR FOR REVENUE SUBMITTED, WITH RESPECT TO THE GROUND RAISED AT SL.NO.1 AND 2 (SUPRA), THAT THE CALCULATION OF THE DISTANCE OF 8 KMS FROM BBMP LIMITS HAS TO BE THE DISTANCE MEASURED AS THE CROW FLIES, I.E. THAT THE AERIAL DISTANCE HAS TO BE CALCULATED AND NOT THE DISTANCE AS PER ROAD. IN SUPPORT OF THIS PROPOSITION, THE ID.DR CITED THE SUBSTITUTED PROVISIONS OF SUB-CLAUSE (B) OF CLAUSE (III) OF SECTION 2(14) OF THE ACT BY FINANCE ACT 2013 W.E.F. 01/04/2014. IT WAS CONTENDED THAT THE AFORESAID SUBSTITUTION OF SECTION 2(14)(III)(B) OF THE INCOME-TAX ACT, 1961 IS CLARIFICATORY IN NATURE AND IF THE SAID LANDS ARE AERIALLY MEASURED, THEN THE SAME WOULD COME WITHIN THE BBMP LIMITS AND CONSEQUENTLY FALL WITHIN THE MEANING OF 'URBAN LAND' AS PER EXPLANATION 1(B) TO SECTION 2(EA) OF THE ACT. IT IS SUBMITTED THAT WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 6 OF 11 IN VIEW OF THE ABOVE, THE AO WAS CORRECT IN TREATING THE SAID LANDS AS 'URBAN LAND' AND CONSEQUENTLY THE SAID LANDS ARE LIABLE TO BE INCLUDED IN THE NET WEALTH OF THE ASSESSEE AND BE EXIGIBLE TO WEALTH-TAX. IT WAS ALSO SUBMITTED THAT THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M. R. SEETHARAM IN WTA NO.16 TO 29/BANG/2014 DATED 31.03.2015 RELIED UPON BY THE ASSESSEE HAS NOT BEEN ACCEPTED AND THE DEPARTMENTAL APPEAL UNDER SECTION 260A OF THE ACT IS PENDING BEFORE THE HONBLE KARNATAKA HIGH COURT. 4.2.1 THE ID.AR FOR THE ASSESSEE PLACED ON RECORD OF THE DECISION OF THE CO-ORDINATE BENCH IN THE CASES, INTER ALIA, OF M. R. PADMAVATHY TRUST AND M. R. JANAKIRAM (HUF) IN WTA NO.24/BANG/2017 & WTA NO.29/BANG/2017 DATED 17.08.2018 FOR ASSESSMENT YEAR 2007-08 AND SUBMITTED THAT BOTH THE ISSUES RAISED BY THE REVENUE IN THESE APPEALS HAVE BEEN CONSIDERED BY THE TRIBUNAL, WHICH HAS HELD THAT THE SAID LANDS ARE AGRICULTURAL LANDS AND DO NOT PARTAKE THE CHARACTER OF CAPITAL ASSET AS PER THE EXPLANATION 1(B) TO SECTION 2(EA) OF THE ACT. THAT BEING SO, THESE LANDS ARE NOT 'URBAN LANDS' EXIGIBLE TO WEALTH-TAX. IT IS SUBMITTED THAT IN VIEW OF THE TRIBUNAL'S ORDER (SUPRA), THESE ISSUES HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST REVENUE. 4.2.2 IN RESPECT OF THE RELIANCE PLACED BY THE ID. DR ON THE SUBSTITUTED PROVISIONS OF SUB-CLAUSE (B) OF CLAUSE (III) OF SECTION 2(14) OF THE INCOME- TAX ACT, 1961, VIDE FINANCE ACT, 2013 W.E.F. 01/04/2014 AND CLARIFICATORY IN NATURE, THE ID. AR FOR THE ASSESSEE SUBMITTED THAT REVENUE CONTENTIONS ARE NOT ACCEPTABLE AS THESE SUBSTITUTED PROVISIONS (SUPRA) ARE APPLICABLE FROM ASSESSMENT YEAR 2014-15 ONWARDS AND CANNOT BE APPLIED RETROSPECTIVELY. THE LAW APPLICABLE FOR ASSESSMENT YEARS 2007-08 AND 2009-10 ALONE HAS TO BE CONSIDERED AND APPLIED. ACCORDING TO THE LD. AR, THE PROVISIONS OF SUB-CLAUSE (B) OF CLAUSE (III) OF SECTION 2(14) OF THE INCOME- WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 7 OF 11 TAX ACT,1961, HAS BEEN SUBSTITUTED AND NOT AMENDED AND THEREFORE, AS HELD BY VARIOUS COURTS, SUBSTITUTED PROVISIONS ARE TO BE GIVEN EFFECT TO PROSPECTIVELY ONLY AND CANNOT BE CONSIDERED TO BE CLARIFICATORY IN NATURE. 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JUDICIAL PRONOUNCEMENTS CITED. 4.3.2 THE ARGUMENTS RAISED BY LEARNED DR FOR REVENUE BEFORE US IS THAT SINCE SAID LAND IS SITUATED IN BIAPPA WHICH IS AN 'AUTHORITY', THE SAID LAND IS URBAN LAND AND THEREFORE, A CAPITAL ASSET EXIGIBLE TO WEALTH-TAX. WE FIND THAT THE SAID ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE AFORESAID TWO ASSESSEES' CASES, ORDER IN WTA NOS.24/BANG/2017 AND 29/BANG/2017 DATED 17.08.2018, WHEREIN THE CO-ORDINATE BENCH RELIED ON THE ORDER OF ANOTHER CO-ORDINATE BENCH IN THE CASE OF ONE OF THE CO-OWNERS SHRI M.R.SEETHARAM IN ITA NO.1654/BANG/2012 IN WHICH THE TRIBUNAL HELD AT PARAS 8 TO 9.1 THEREOF THAT BIAPPA DOES NOT QUALIFY TO BE AN AUTHORITY AND THEREFORE, THE SAID LANDS ARE AGRICULTURAL LANDS AND NOT URBAN LAND OR CAPITAL ASSETS AS CANVASSED BY REVENUE. CONSEQUENTLY, THE ARGUMENTS RAISED BY REVENUE ARE DISMISSED. 4.4.1 AS REGARDS THE OTHER ARGUMENT PUT FORTH, THE LD. DR HAD SUBMITTED THAT THE DISTANCE HAS TO BE CONSIDERED AS THE CROW FLIES I.E THE DISTANCE HAS TO BE CALCULATED AERIALLY AND NOT BY ROAD. IN THIS CONTEXT, THE ID. DR RELIED ON THE PROVISIONS OF CLAUSE (B) OF CLAUSE (III) OF SECTION 2(14) OF THE INCOME- TAX ACT, 1961 AS SUBSTITUTED BY FINANCE ACT, 2013 W.E.F. 01/04/2014; WHICH HE SUBMITTED WERE TO BE GIVEN RETROSPECTIVE OPERATION AS THEY ARE ONLY CLARIFICATORY IN NATURE. WE HAVE GIVEN CAREFUL CONSIDERATION TO THE SUBMISSIONS PUT FORTH BY THE ID. DR AND ARE OF THE CONSIDERED VIEW THAT IT IS NOT TENABLE FOR THE FOLLOWING REASONS - FIRSTLY, THE ASSESSMENT YEAR IN THE TWO APPEALS BEFORE US IS ASSESSMENT YEAR 2007-08 AND 2009-10 AND THE LAW IN WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 8 OF 11 OPERATION AT THAT POINT IN TIME IS TO BE CONSIDERED, UNLESS RETROSPECTIVE OPERATION IS SPECIFICALLY PROVIDED IN THE STATUTE. IN THE CASES ON HAND, FOR ASSESSMENT YEAR 2007-08, THE SAID PROVISIONS OF SUB-CLAUSE (B) OF CLAUSE (III) OF SECTION 2(14) OF THE INCOME-TAX ACT, 1961 HAVE BEEN SUBSTITUTED BY THE FINANCE ACT, 2013 W.E.F. 01/04/2014 AND THEREFORE, ARE APPLICABLE ONLY FOR AND FROM ASSESSMENT YEAR 2014-15 ONWARDS; AND THEREFORE OPERATE PROSPECTIVELY AND CANNOT BE GIVEN RETROSPECTIVE OPERATION. THE HON'BLE APEX COURT IN THE CASE IN THE CASE VATIKA TOWNSHIP PVT. LTD. (367 ITR 466) HAS HELD THAT WHEN THE LEGISLATURE HAS GIVEN THE APPLICABILITY OF A SECTION FROM A PARTICULAR DATE, THEN IT IS IMPERMISSIBLE FOR THE AUTHORITY TO CONSIDER THE SAME RETROSPECTIVELY, FOR EARLIER YEARS. 4.4.2 SUBSTITUTION HAS THE EFFECT OF DELETING THE OLD RULE AND MAKING THE NEW RULE OPERATIVE. IN COMMON PARLANCE, THE WORD 'SUBSTITUTE' WOULD ORDINARILY MEAN 'TO PUT ONE IN PLACE OF ANOTHER PERSON OR THING' OR 'TO REPLACE' OR 'TO EXCHANGE'. SUBSTITUTION OF A PROVISION RESULTS IN THE REPEAL THEREOF AND ITS REPLACEMENT BY THE NEW PROVISIONS. THE PROCESS OF SUBSTITUTION CONSISTS OF TWO STEPS; THE FIRST BEING THAT THE EXISTING PROVISION/RULE WOULD CEASE TO EXIST AND THE NEW PROVISION/RULE IS BROUGHT INTO EXISTENCE IN ITS PLACE. IT IS WELL SETTLED RULE OF CONSTRUCTION THAT EVERY STATUTE IS PROSPECTIVE UNLESS IT IS EXPRESSLY OR BY NECESSARY IMPLICATION MADE TO HAVE RETROSPECTIVE EFFECT. IF THE AMENDMENT ACT EXPRESSLY STATES THAT THAT THE SUBSTITUTED PROVISION SHALL COME INTO FORCE FROM THE DATE THE AMENDMENT COMES INTO FORCE, THEN THE SAID PROVISION IS PROSPECTIVE IN NATURE AND IT WOULD NOT BE OPEN TO ANY COURT TO GIVE RETROSPECTIVE OPERATION TO SUCH PROVISION. ULTIMATELY, THE INTENTION OF LEGISLATURE IS THE SOLE GUIDE FOR DECIDING WHETHER PROVISIONS ARE PROSPECTIVE OR RETROSPECTIVE. IN THE LIGHT OF THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE CONTENTION RAISED BY THE ID. DR FOR REVENUE, THAT THE PROVISION SUB-CLAUSE (B) OF CLAUSE (III) OF SECTION 2(14) OF THE INCOME-TAX WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 9 OF 11 ACT, 1961 WHICH IS SUBSTITUTED BY THE FINANCE ACT 2013 W.E.F 01/04/2014 IS CLARIFICATORY IN NATURE AND NEEDS TO BE GIVEN RETROSPECTIVE OPERATION IN CONSIDERING THE DISTANCE TO BE CALCULATED AERIALLY; CANNOT BE ACCEPTED. 4.4.3 WE ALSO NOTE ON A PERUSAL OF THE ORDERS OF ASSESSMENT THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED A LETTER FROM THE ANNESHWARA GRAM PANCHAYAT OFFICE CONFIRMING THAT THE LAND DOES NOT COME WITHIN THE LIMITS OF ANY CORPORATION OR MUNICIPALITY AND CONFIRMATION FROM THE OFFICE OF THE TAHSILDAR, DEVARAHALLI MEASURING THE DISTANCE FROM BBMP LIMITS. PER CONTRA, REVENUE'S CASE IS THAT THE SAID LANDS ARE SITUATED WITHIN BIAPPA WHICH HAS AN AUTHORITY AS PER THE DEFINITION OF 'ASSET' WHICH PROPOSITION HAS BEEN NEGATIVE BY A CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M.R.SEETHARAM IN ITA NO.1654/BANG/2012(SUPRA). IN THE CASE OF CIT VS. SATINDER PAL SINGH (229 CTR 82) IT WAS HELD THAT THE RECKONING OF URBANIZATION AS A FACTOR FOR PRESCRIBING THE DISTANCE IS OF SIGNIFICANCE WHICH WOULD YIELD TO THE PRINCIPLE OF MEASURING DISTANCE IN TERMS OF APPROACH ROADS RATHER THAN BY STRAIGHT LINE OR HORIZONTAL PLANE OR AS PER CROWS FLIGHT'. THUS, IT IS CLEAR TO US THAT FOR THE PERIOD UNDER CONSIDERATION, IN THE APPEALS BEFORE US I.E. ASSESSMENT YEARS 2007-08 AND 2009-10 THE DISTANCE HAS TO BE CALCULATED BY ROAD AND NOT AS THE CROW FLIES OR BY STRAIGHT LINE. IN THIS FACTUAL AND LEGAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, THIS GROUND AND ARGUMENT RAISED BY REVENUE IS DISMISSED. 4.5 RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASES OF M. R. PADMAVATHY TRUST AND M. R. JANAKIRAM (HUF) FOR ASSESSMENT YEAR 2007-08 IN WTA NO.24/BANG/2017 & WTA NO.29/BANG/2017 DATED 17.08.2018 AND OF ANOTHER CO-ORDINATE BENCH IN THE CASE OF SHRI M.R.SEETHARAM IN ITA NO.1654/BANG/2012, WE HOLD THAT THE SAID LANDS IN QUESTION ARE NOT 'URBAN LANDS' BUT 'AGRICULTURAL LANDS' AND HENCE NOT EXIGIBLE TO WEALTH-TAX. CONSEQUENTLY, REVENUE'S APPEALS ARE DISMISSED. WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 10 OF 11 5. IN THE RESULT, REVENUE'S APPEALS FOR ASSESSMENT YEARS 2007-08 AND 2009-10 ARE DISMISSED. ASSESSEE'S CROSS OBJECTIONS (CO NOS.36 & 37/BANG/2019): 6. IN THESE CROSS OBJECTIONS (CO) THE ASSESSEE HAS CHALLENGED THE AO'S ASSUMPTION OF JURISDICTION BY ISSUE OF NOTICE U/S 17 OF THE ACT FOR RE-OPENING THE ASSESSMENTS FOR ASSESSMENT YEARS 2007-08 AND 2009-10. SINCE WE HAVE ALREADY HELD ON MERITS THAT THE SAID LANDS ARE NOT 'URBAN LAND' AND THEREFORE, NOT EXIGIBLE TO WEALTH-TAX, THE ISSUE ON JURISDICTION RAISED BY THE ASSESSEE IN HER CROSS OBJECTIONS BECOME ACADEMIC AND THEREFORE, NOT ADJUDICATED AT THIS STAGE. 7. IN THE RESULT, REVENUE'S APPEALS FOR ASSESSMENT YEAR 2007-08 AND 2009- 10 ARE DISMISSED AND THE ASSESSEES' C.OS ARE ALSO DISMISSED AS ACADEMIC AND INFRUCTUOUS. PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2019. SD/- SD/- (N. V. VASUDEVAN) (JASON P. BOAZ) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE. DATED: 10 TH MAY, 2019. /NS/* WTA NOS. 07 AND 08/BANG/2019 C.O. NO.36 AND 37/BANG/2019 PAGE 11 OF 11 COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.