SHRI MUNIVENKATAPPA RAJA GOPAL ,PATEL MUNIVENKATAPPA ROAD, NAGAWARA V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3(3)(1), BANGALORE

WTA 2/BANG/2025

AI Insights

The case involves multiple appeals filed by Shri. Munivenkatappa Raja Gopal against the orders of the Commissioner of Wealth Tax (Appeals) and the Assessing Officer, concerning the levy of wealth tax on certain immovable properties for the assessment years 2012-13 to 2015-16. The primary contention was whether the properties in question constituted 'net wealth' under the Wealth Tax Act, 1957. The properties were located in Nagavara village, Bengaluru, and included land that had been notified for acquisition by the Bengaluru Development Authority (BDA) and later denotified. The tribunal examined the legal definitions of 'assets' and 'net wealth' under the Act, the impact of the BDA's acquisition and denotification on property ownership, and the implications of a Joint Development Agreement (JDA) with M/s Karle Properties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790064 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Wealth Tax Appeal
• Pronouncement Date: 27-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 16-05-2025
• Other Referred Cases: Principal Commissioner of Income Tax, 1 vs. M. Balasubramaniam, Mr.Maynak Poddar (HUF) vs. Wealth-tax Officer, The Pr. CWT v. Mrs. Sushila Devi Kejriwal
• Laws Referred To: Wealth Tax Act, 1957
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SIDDESH N GADDI
• Keywords: Set aside; Reassessment proceedings; Question of law; Tax effect; Gift; Audit objection; Competent authority

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI. LAXMI PRASAD SAHU, ACCOUNTANT MEMBER AND SHRI. SOUNDARARAJAN K, JUDICIAL MEMBER WTA Nos.1 to 4/Bang/2025 Assessment Years : 2012-13 to 2015-16 Shri. Munivenkatappa Raja Gopal, No.733, Patel Munivenkatappa Road, Nagawara, Bengaluru – 560 045, Karnataka. PAN : ANIPG 6955 H Vs. ACIT, Circle – 3(3)(1), Bengaluru. APPELLANT RESPONDENT Assessee by : Shri. Siddesh N Gaddi, CA Revenue by : Shri. Subramanian S, JCIT(DR)(ITAT), Bangalore. Date of hearing : 28.10.2025 Date of Pronouncement : 27.11.2025 O R D E R Per Laxmi Prasad Sahu, Accountant Member : All these four appeals are filed by the assessee against common Orders passed by the CWT(A)-15, Bengaluru, dated 20.03.2025, on the following grounds: Grounds of appeal for Assessment Year 2012-13 : 1. The impugned order passed by the Learned CWT(A) & AO, to the extent prejudicial to the Appellant, is not justified in law and in the facts and circumstances of the case. 2. The Ld. CWT(A) has erred in law and on facts in upholding the order of the Ld.AO wherein wealth tax has been levied on the Appellant; Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 2 of 26 3. The Learned CWT(A) & Ld. AO has erred in making an addition of immovable property held as on 31.03.2012 for the purpose of levy of wealth tax. 4. The Ld. CWT(A) has erred in law and on facts in passing the order against the requirements of section 5B, which requires passing a speaking order on merits (as sufficient reasons were not provided); 5. The Ld. CWT(A) has erred in law and on facts in not setting aside the order as per the provisions of section 25(1) of the Act. 6. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of the definition of ‘Net wealth’, u.s. 2(m) as the asset didn’t belong to the Assessee on valuation date. 7. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of section 4 (i.e. inclusion while calculation of new wealth) 8. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without appreciating that the same has been notified for acquisition. 9. Without prejudice to the above, the Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that, the appellant had entered into Joint Development Agreement with M/s Karle Properties. 10. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property located at Sy. No. 76/1, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that the appellant had gifted such immovable property to his spouse and his spouse had let out such premises for commercial purposes. The Lease agreement copies are enclosed. 11. The Learned CWT(A) & Ld. AO has erred in valuing the immovable property as per Schedule III of the Wealth Tax Act, 1957. Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 3 of 26 12. The Learned CWT(A) & AO has erred in law and in facts in making a total addition of Rs. 7,84,80,100/- based on mere presumptions and surmises. 13. The impugned order of the learned CWT(A) & AO is against the principles of equity and justice insofar as not provide a sufficient opportunity to the appellant. 14. The Learned CWT(A) & AO has erred in law and on facts in raising demand vide issue of notice under section 30 of the Act (Total tax effect: Rs. 8,78,976/-) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 23 of the Act by the Commissioner of Wealth tax (Appeals) by upholding holding additions u/s 16(5) r.w.s 17 of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted. Grounds of appeal for Assessment Year 2013-14 : 1. The impugned order passed by the Learned CWT(A) & AO, to the extent prejudicial to the Appellant, is not justified in law and in the facts and circumstances of the case. 2. The Ld. CWT(A) has erred in law and on facts in upholding the order of the Ld.AO wherein wealth tax has been levied on the Appellant; 3. The Learned CWT(A) & Ld. AO has erred in making an addition of immovable property held as on 31.03.2012 for the purpose of levy of wealth tax. 4. The Ld. CWT(A) has erred in law and on facts in passing the order against the requirements of section 5B, which requires passing a speaking order on merits (as sufficient reasons were not provided); 5. The Ld. CWT(A) has erred in law and on facts in not setting aside the order as per the provisions of section 25(1) of the Act. 6. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of the definition of Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 4 of 26 ‘Net wealth’, u.s. 2(m) as the asset didn’t belong to the Assessee on valuation date. 7. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of section 4 (i.e. inclusion while calculation of new wealth) 8. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without appreciating that the same has been notified for acquisition. 9. Without prejudice to the above, the Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that, the appellant had entered into Joint Development Agreement with M/s Karle Properties. 10. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property located at Sy. No. 76/1, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that the appellant had gifted such immovable property to his spouse and his spouse had let out such premises for commercial purposes. The Lease agreement copies are enclosed. 11. The Learned CWT(A) & Ld. AO has erred in valuing the immovable property as per Schedule III of the Wealth Tax Act, 1957. 12. The Learned CWT(A) & AO has erred in law and in facts in making a total addition of Rs. 7,84,80,100/- based on mere presumptions and surmises. 13. The impugned order of the learned CWT(A) & AO is against the principles of equity and justice insofar as not provide a sufficient opportunity to the appellant. 14. The Learned CWT(A) & AO has erred in law and on facts in raising demand vide issue of notice under section 30 of the Act (Total tax effect: Rs. 9,55,949/-) Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 5 of 26 On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 23 of the Act by the Commissioner of Wealth tax (Appeals) by upholding holding additions u/s 16(5) r.w.s 17 of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted. Grounds of appeal for Assessment Year 2014-15 : 1. The impugned order passed by the Learned CWT(A) & AO, to the extent prejudicial to the Appellant, is not justified in law and in the facts and circumstances of the case. 2. The Ld. CWT(A) has erred in law and on facts in upholding the order of the Ld.AO wherein wealth tax has been levied on the Appellant; 3. The Learned CWT(A) & Ld. AO has erred in making an addition of immovable property held as on 31.03.2012 for the purpose of levy of wealth tax. 4. The Ld. CWT(A) has erred in law and on facts in passing the order against the requirements of section 5B, which requires passing a speaking order on merits (as sufficient reasons were not provided); 5. The Ld. CWT(A) has erred in law and on facts in not setting aside the order as per the provisions of section 25(1) of the Act. 6. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of the definition of ‘Net wealth’, u.s. 2(m) as the asset didn’t belong to the Assessee on valuation date. 7. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of section 4 (i.e. inclusion while calculation of new wealth) 8. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without appreciating that the same has been notified for acquisition. 9. Without prejudice to the above, the Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 6 of 26 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that, the appellant had entered into Joint Development Agreement with M/s Karle Properties. 10. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property located at Sy. No. 76/1, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that the appellant had gifted such immovable property to his spouse and his spouse had let out such premises for commercial purposes. The Lease agreement copies are enclosed. 11. The Learned CWT(A) & Ld. AO has erred in valuing the immovable property as per Schedule III of the Wealth Tax Act, 1957. 12. The Learned CWT(A) & AO has erred in law and in facts in making a total addition of Rs. 7,84,80,100/- based on mere presumptions and surmises. 13. The impugned order of the learned CWT(A) & AO is against the principles of equity and justice insofar as not provide a sufficient opportunity to the appellant. 14. The Learned CWT(A) & AO has erred in law and on facts in raising demand vide issue of notice under section 30 of the Act (Total tax effect: Rs. 10,53,853/-) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 23 of the Act by the Commissioner of Wealth tax (Appeals) by upholding holding additions u/s 16(3) r.w.s 17 of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted. Grounds of appeal for Assessment Year 2015-16 : 1. The impugned order passed by the Learned CWT(A) & AO, to the extent prejudicial to the Appellant, is not justified in law and in the facts and circumstances of the case. Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 7 of 26 2. The Ld. CWT(A) has erred in law and on facts in upholding the order of the Ld.AO wherein wealth tax has been levied on the Appellant; 3. The Learned CWT(A) & Ld. AO has erred in making an addition of immovable property held as on 31.03.2012 for the purpose of levy of wealth tax. 4. The Ld. CWT(A) has erred in law and on facts in passing the order against the requirements of section 5B, which requires passing a speaking order on merits (as sufficient reasons were not provided); 5. The Ld. CWT(A) has erred in law and on facts in not setting aside the order as per the provisions of section 25(1) of the Act. 6. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of the definition of ‘Net wealth’, u.s. 2(m) as the asset didn’t belong to the Assessee on valuation date. 7. The Learned CWT(A) & Ld. AO has erred in fact and law that the subject property doesn’t fall under the ambit of section 4 (i.e. inclusion while calculation of new wealth) 8. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without appreciating that the same has been notified for acquisition. 9. Without prejudice to the above, the Learned CWT(A) & Ld. AO has erred in making the addition of immovable property held as on 31.03.2013, located at Sy. No. 96/1 and 94/14, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that, the appellant had entered into Joint Development Agreement with M/s Karle Properties. 10. The Learned CWT(A) & Ld. AO has erred in making the addition of immovable property located at Sy. No. 76/1, Nagavara Village, Kasaba Hobli, Bangalore, North Taluk, without considering the fact that the appellant had gifted such immovable property to his spouse and his spouse had let out such premises for commercial purposes. The Lease agreement copies are enclosed. Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 8 of 26 11. The Learned CWT(A) & Ld. AO has erred in valuing the immovable property as per Schedule III of the Wealth Tax Act, 1957. 12. The Learned CWT(A) & AO has erred in law and in facts in making a total addition of Rs. 7,84,80,100/- based on mere presumptions and surmises. 13. The impugned order of the learned CWT(A) & AO is against the principles of equity and justice insofar as not provide a sufficient opportunity to the appellant. 14. The Learned CWT(A) & AO has erred in law and on facts in raising demand vide issue of notice under section 30 of the Act (Total tax effect: Rs. 11,52,717/-) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 23 of the Act by the Commissioner of Wealth tax (Appeals) by upholding holding additions u/s 16(5) r.w.s 17 of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted. 3. On going through the above grounds, we noted that issue raised for all the years are common except the figures reported regarding wealth tax liability of the property at Survey No.94/14, 96/1 and 76/1 situated at Nagavara village, Kasaba Hobli, Bangalore North Taluk. 4. Briefly stated, facts of the case are that as per information, assessee sold land for sale consideration of Rs.9,00,00,000/- and Rs.2,21,00,000/-. The sale deed executed on 12.06.2015 shows the properties located at No.94/14, 96/1 and 76/1 situated at Nagavara village, Kasaba Hobli, Bangalore North Taluk. As per the documents available on record, the said properties were converted by the assessee for non-agricultural purposes in 1992. Thus, it is clear that assessee was owner of the properties as on 30.03.2012, 31.03.2013, 31.03.2014 and 31.03.2015. In view of the above, assessee was liable for Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 9 of 26 wealth tax for the Assessment Years 2013-14 to 2015-16 and assessee did not file return of income. Therefore the aforesaid properties of the assessee were brought to wealth tax as per Wealth Tax Act, 1957 within the meaning of section 17. Accordingly, notice under section 17 dated 29.03.2019 issued and duly served on the assessee. Further, notice was issued to the assessee to file return of income. Assessee did not file return of income. Accordingly, assessment was completed under section 16(5) of the Wealth Tax Act on the basis of documents available before him. Accordingly, AO computed the tax as under: Sl. No. AY Net Wealth Assessed in Rs. 1. 2012-13 7,84,80,093 2. 2013-14 8,53,52,600 3. 2014-15 9,40,94,488 4. 2015-16 10,29,21,260 5. Aggrieved from the above Order, assessee filed appeal before the CWT(A). The learned CWT(A) passed a common Order and dismissed appeals of the assessee. 6. Aggrieved from the Order of the learned CWT(A), assessee filed appeals before the Tribunal. The learned Counsel filed written synopsis as under: 1. The Appellant had sold two properties (land) for sale consideration of Rs. 9,00,00,00/- and Rs. 2,21,00,000/- (total -Rs. 11,21,00,000) vide sale deeds dated 12.06.2015 located at Sy.no 94/1, 96/1, and 76/1, Nagavara Village, Kasabha Hobli, Bengaluru North Taluk. Subsequentially it were converted from Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 10 of 26 Agriculture Land to non-agricultural purposes during the year 1992 vide orders bearing no.B.DIS.ALN.SR.(N)31/1992-93 and bearing no.B.DIS.ALN.SR.(N)23/1992-93 both dated 01.10.1992 issued by the Special Deputy Commissioner, Bengaluru District, Bengaluru. 2. The Appellant has not filed the wealth tax return as required by the Wealth Tax Act, 1957 (hereafter referred as ‘Act’) till AY 2015-16. 3. The Appellant case for selected for reopened as per the provisions of the Act after obtaining necessary approval from the Competent Authority. 4. The learned AO passed an Order u/s 16(5).r.w.s.17 of the Act dated 17.12.2019 for AY 2012-13 to 2015-16 by making the following addition for multiple year as mentioned below for your kind consideration: Sl. No. AY Additions Demand 1 2012-13 Rs.7,84,80,893 Rs.8,78,976 2 2013-14 Rs.8,53,52,600 Rs.9,55,949 3 2014-15 Rs.9,40,94,488 Rs.10,53,853 4 2015-16 Rs.10,29,21,260 Rs.11,52,717 5. Aggrieved by the above order the Appellant has filed an Appeal before Commissioner of Wealth Tax (Appeals)-15, Bengaluru vide appeal dated 15.01.2020 for AY 2012-13 to 2015-16. 6. After considering the submission, the Commissioner of Wealth Tax (Appeals)-15, Bengaluru has upheld the reassessment order by passing an common order u/ 23 of the Act dated 20.03.2025 for AY 2012-13 to 2015-16. 7. Being aggrieved by the Commissioner of Wealth Tax Order, the appellant has filed an appeal dated 16.05.2025. 8. Commons submission for AY 2012-13 to 2015-16 9. Details of properties involved 9.1. [Property 1] The learned AO has erred in making an addition of immovable property held as 31.03.2013, located at Sy no 94/14, and 96/1, Nagavara Village, Kasabha Hobli, Bengaluru North Taluk. 9.2. [Property 2] In addition to the above the learned AO has erred in making an addition of immovable property, located at Sy no 76/1, Nagavara Village, Kasabha Hobli, Bengaluru North Taluk. Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 11 of 26 10. Sequence of event for better clarity on understanding – Property 1 10.1.The land was notified for acquisition by the Bengaluru Development Authority (BDA) in February 2003. 10.2.The Appellant has entered into a conditional JDA with M/s. Karle Properties on 05.04.2007 for Sy no 94/14, and 96/1. 10.3.The land was de-notified for acquisition by the Bengaluru Development Authority (BDA) in June 2014. 10.4.The Appellant had sold the properties as per sale deed dated 12.06.2015, it is evident that the properties located at Sy no 94/14, and 96/1, , Nagavara Village, Kasabha Hobli, Bengaluru North Taluk. 11. Submission against the properties located at Sy no 94/14, and 96/1, , Nagavara Village, Kasabha Hobli, Bengaluru North Taluk i.e [Property 1] 12. As per the Notification issued by the Government of Karnataka, the subject land was notified for acquisition by the Bengaluru Development Authority (BDA) in February 2003. The said notification forms part of the official records of the BDA and is relevant for determining the nature and status of the property at the material time. <> Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 12 of 26 13. From the above Notification, it is evident that the Appellant ceased to be the owner of the land upon the said acquisition by the Bengaluru Development Authority (BDA) as per the Government Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 13 of 26 Notification referred to above. Consequently, the ownership and possession of the property stood vested with the statutory authority, and the Appellant no longer retained any right, title, or interest over the said land from the date of such notification. 14. In this context, we respectfully invite your kind attention to clause (ea) of section 2 of the Act, which defines the term “assets” for the purpose of the said provision. The said clause clearly excludes certain categories of property, including land and buildings that are not owned by the assessee or are otherwise not in his possession or enjoyment. 15. Further, as evident from the notification, the Appellant is precluded from undertaking any development activity in the said lands. 16. In this regard we also wish to bring your kind attention to the clause (ea) of the section 2 of the Act: (ea) “assets”, in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means— .. … ….. …….. but does not include land classified as agricultural land in the records of the Government and used for agricultural purposes or land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated or the land occupied by any building which has been constructed with the approval of the appropriate authority or any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him or any land held by the assessee as stock-in- trade for a period of ten years from the date of its acquisition by him. 17. It is submitted that, on a perusal of the definition of the term “asset” as contained in Section 2(ea) of the Act, it is evident that the land in question squarely falls within the exclusionary clause of the said definition. Accordingly, the subject property cannot be regarded as an “asset” for the purposes of the Act, since it stood acquired by the Bengaluru Development Authority under the Government Notification, and the Appellant neither held ownership nor possessed any enforceable rights over the said land subsequent to such acquisition. 18. While entering JDA agreement with M/s.Karle Properties vide dated 05.04.2007, Where it has noted that land has been notified by BDA as mentioned above, the relevant extract of JDA agreement given below for your kind consideration: Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 14 of 26 << this page intentionally left blank>> Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 15 of 26 19. It is further submitted that the JDA executed in respect of the said property also makes specific reference to the Notification issued by the BDA. This clearly indicates that the parties to the agreement were fully aware that the land had already been notified for acquisition by the BDA. Consequently, the Appellant was unable to obtain the requisite approvals or permissions from the competent authorities in respect of the schedule property, as the same was already under the purview of the statutory acquisition proceedings. 20. At the later stage the land was de-notified for acquisition by the BDA in June 2014, the relevant extract of notification is given below for your kind consideration: Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 16 of 26 21. In addition to the above, we also bring your kind attention in the case of Principal Commissioner of Income Tax, 1 vs. M. Balasubramaniam [2020] 429 ITR 556 (Madras)[14-10-2020] in the Madras High Court where facts of the case are similar to the Appellant, it has been held that: 6 We find that the order passed by the Tribunal is perfectly legal and valid. Furthermore, we note that very recently, the Government of Tamil Nadu, in G.O.(D). No. 91, Highways and Minor Ports (HW 2) Department, dated 6-6-2019 has acquired the part of the land in Survey No. 406/78 Part to an extent of 6500 sqm. Further, the learned counsel for the assessee has submitted that till date no permission is being granted to put up any construction on the said property and the stand taken by the CMDA in the letter dated 17- 4-2012 has been reiterated in the letter addressed to the assessee himself dated 21-12-2015. In the said communication, the assessee has been informed that the site under reference lies in the IT corridor and CRZ-II within 100m from Buckingham Canal and the street alignment of proposed 30.5m (100ft) road to ECR is passing through the said survey number. Land use assigned as per FMB has been furnished to the applicant/assessee. Further, it has been stated that any sub-division or construction of building or development in the land in question is not valid in law unless planning permission is applied for and duly granted for subdivision, construction or development. Therefore, as on date, the assessee cannot put up any construction on the said property. More or less, an identical issue came up for consideration before this Court in the case of The Pr. CWT v. Mrs. Sushila Devi Kejriwal Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 17 of 26 [T.C.A. Nos. 683 to 686 of 2019, dated 1-10-2020] wherein the said property fell within the Coastal Region Zone-III and identical submissions were made by the revenue to sustain the revenue to sustain the wealth tax assessment. The appeal filed by the revenue was dismissed by judgment dated 1-10-2020, in which, we had followed the decision in T.C.A.Nos.622 to 624 of 2018 dated 30-9-2020. The operative portion of the judgment reads as follows: \"5. In the assessee's own case for the assessment years from 2005- 2006 to 2007-2008 the Tribunal rejected the Department's appeals on the ground of low tax effect. The Revenue carried the matter by way of appeals to this Court contending that the matter arose under the Wealth Tax Act and the relevant circular of the Central Board of Direct Taxes relied upon by the assessee was inapplicable. By common judgment dated 30-9-2020 in TCA.Nos.622 to 624 of 2018, we rejected the said contention raised by the Revenue and dismissed the appeals filed by the Revenue. 6. In the said common judgment, we dealt with the merits of the claim and held in favour of the assessee on the following lines : \"4. The first two substantial questions of law have to be answered against the revenue, in the light of the Circular issued by Central Board Direct Taxes [for brevity, 'CBDT'] bearing Circular No. 5/2019 dated 5 2-2019, which reads as follows: 'Reference is invited to Board's Circular No. 3 of 2018 dated 11-7-2018 (hereinafter, referred to as \"the Circular\") vide which monetary limits for filing of income tax appeals by the Department before Income tax Appellate Tribunal, High Courts and SLPs/appeals before Supreme Court were specified. Para 11 of the Circular states that the monetary limits specified in para 3 shall not apply to writ matters and Direct tax matters other than Income-tax and filing of appeals in such cases shall continue to be governed by relevant provisions of statute and rules. 2. There is no charge under Wealth Tax Act, 1957 w.e.f 1st April, 2016. Therefore, as a step towards litigation management, it has been decided by the Board that monetary limits for filing of appeals in Income-tax case as prescribed in Para 3 of the Circular shall also apply to Wealth Tax appeals through extension of the Circular to Wealth tax matters in a mutatis mutandis manner and with modifications as prescribed hereunder: 3. For the purpose of Wealth Tax appeals: A. Para 4 of the Circular shall be read as follows: \"For this purpose, 'tax effect' means the difference between the tax on Net Wealth assessed and the tax that would have been chargeable had such Net Wealth been reduced by the amount of wealth in respect of the issues against which appeals is intended to be filed. However, the tax will not include any interest thereon, except where Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 18 of 26 chargeability of interest itself is in dispute. In case the chargeability of interest is the issue under dispute, the amount of interest shall be the tax effect. In case of penalty orders, the tax effect will mean quantum of penalty deleted or reduced in the order to be appealed against\" B. Para 11 of the circular shall read as follows: \"The monetary limits specified in para 3 shall not apply to writ matters.\" 4. The said extension of the Circular to wealth tax appeals shall come into effect from the date of issue of this circular. 5. The same may be brought to the notice of all concerned. 6. Hindi version will follow.' 5. In view of the above circular, the threshold limit fixed by the CBDT for the revenue to pursue the appeals has been made applicable to Wealth Tax Appeals also with effect from 5-2-2019. In the light of the above circular, the substantial questions of law Nos.1 and 2 are answered against the revenue. 6. Mr. J. Narayanasamy, learned counsel appearing for the appellant/revenue contended that the Tribunal erred in dismissing the appeals on the ground of law tax effect without taking note of the fact that the revenue audit objection is there in the assessee's case and therefore, the cases would come within the exemption culled out in the circular. 7. It is not clear what is the revenue audit objection in the instant matter. Nevertheless, we have heard the learned counsel for the parties on the merits of the matter. The issue pertains to valuation of a property in Neelankarai village. The assessee contended that the property falls within the high tide zone and in the terms of the coastal zone regulations, the property cannot be put to use for the purpose of constructing any building there on and even if an application is made to the local planning authority/local body, the same will be rejected, as the planning authorities have no jurisdiction to deal with any application for grant of planning permission on a land, which falls within CRZ limits. 8. The assessing officer did not agree with the same, however, the Commissioner of Income-tax [Appeals] - 15 Chennai, [for brevity, 'CITA'] agreed with the assessee by taking note of the fact that the property falls within the CRZ III Category and the agreement of sale, which was entered into by the assessee was cancelled on 4- 6-2005 since at the time of entering into an agreement, the parties were not aware that no construction can be put up on the land. 9. The CITA has recorded the factual finding that the land, which is unbuiltable under any law for the time being in force, is not an urban land and as such, is not an asset Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 19 of 26 within the meaning of Section 2(e)(a) of the Wealth Tax Act. The CITA also referred to a decision in the case of Prabhakar Keshav Kunde v. CIT reported in (2010) 194 Taxman 306 (Bom). Thus, considering that factually, the CITA on verification found that the land falls within the prohibited zone CRZ III category. 10. We find no question of law arises for consideration in the instant cases and therefore, we are not inclined to entertain the appeals filed by the revenue. As mentioned above, the substantial question of law no. 3 raised by the revenue is, stating that the Tribunal ought not to have rejected the revenue's appeal on the ground of low tax effect, without noting the revenue audit objection. Since we have decided in favour of the assessee on merits, substantial question of law no. 3 does not arise for consideration. 11 For the above reasons, the appeals filed by the revenue are dismissed against the revenue and substantial question of law nos.1 and 2 are answered against the revenue and substantial question of law no. 3 is held to be unnecessary in the facts and circumstances. \" 7. In the light of the above position, taking note of the said decision in the assessee's own case for the earlier assessment years, these appeals have to be necessarily rejected. 8. Accordingly, the above tax case appeals are dismissed and the substantial questions of law are answered against the Revenue. Consequently, the connected CMPs are also dismissed. No costs. 7. In the light of the above discussion, we are of the considered view that the order passed by the Tribunal is perfectly legal and valid. Accordingly, the appeal is dismissed and the Substantial Questions of law framed for consideration are answered against the revenue. 22. In the said judgment, the Hon’ble Court held that where the land in question had already been notified for acquisition by the statutory authority, and the Appellant had been divested of ownership and possession, such property could not be treated as the Appellant’s asset for the purpose of taxation under the relevant provisions of the Act. The Court further observed that once the land stands vested in the authority pursuant to statutory acquisition, the assessee cannot be regarded as the owner of such property for purposes of reassessment. 23. In light of the judicial precedent cited above, together with the relevant statutory provisions and the factual matrix of the present case, it is humbly submitted that the addition made by the Learned Assessing Officer and CIT(A) is untenable both in law and on facts. The Appellant has clearly demonstrated that the property in question does not fall within the ambit of the term “asset” as Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 20 of 26 defined under Section 2(ea) of the Act, and consequently, no liability arises under the Wealth-tax provisions. 24. Therefore, considering the binding nature of the aforesaid judgment, the bona fide conduct of the Appellant, and the absence of any legal or factual infirmity in the Appellant’s claim, we most respectfully pray that this Hon’ble Bench be pleased to allow the appeal and grant appropriate relief by deleting the impugned addition in toto. 25. Submission against the properties located at Sy no 76/1, , Nagavara Village, Kasabha Hobli, Bengaluru North Taluk. [Property 2] 26. It is submitted that the above said land was leased out vide a Lease Agreement dated 20.09.2010, wherein the said land was granted to the lessee for the purpose of operating a four-wheeler workshop [commercial use], subject to specific terms and conditions stipulated therein. The relevant extract of the Lease Agreement is reproduced below for your kind consideration: << this page intentionally left blank>> Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 21 of 26 27. In this regard we also wish to bring your kind attention to the clause (ea) of the section 2 of the Act: (ea) “assets”, in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means— (i) any building or land appurtenant thereto (hereinafter referred to as “house”), whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometres from local limits of any municipality (whether known as Municipality, Municipal Corporation or by any other name) or a Cantonment Board, but does not include— (1) a house meant exclusively for residential purposes and which is allotted by a company to an employee or an officer or a director who is in whole-time employment, having a gross annual salary of less than 8[ten lakh rupees]; Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 22 of 26 (2) any house for residential or commercial purposes which forms part of stock-in-trade; (3) any house which the assessee may occupy for the purposes of any business or profession carried on by him; (4) any residential property that has been let-out for a minimum period of three hundred days in the previous year; (5) any property in the nature of commercial establishments or complexes;] (ii) motor cars (other than those used by the assessee in the business of running them on hire or as stock-in-trade). 28. It is submitted that, on a plain reading of the definition of “asset” as contained in clause (ea) of section 2 of the Act, it is evident that any property in the nature of a commercial establishment or complex does not fall within the ambit of the term “asset.” The legislative intent behind the said provision clearly excludes commercial properties that are used for business or commercial purposes from the purview of taxable assets. 29. In the present case, the subject property was leased for the operation of a four-wheeler workshop, which is undeniably a commercial activity. Hence, the said property is expressly excluded from the definition of “asset” as per section 2(ea) of the Act. Accordingly, there arises no obligation or requirement for the Appellant to file a wealth-tax return for the year under consideration. 30. The above alternate submissions are without prejudice to the fact that the Appellant was not the owner of the said asset as it was gifted to his wife. 31. In addition to the above, we also bring your kind attention in the case of Mr.Maynak Poddar (HUF) vs. Wealth-tax Officer[2003] 181 CTR 362 (Calcutta)[24-02-2003] where facts of the case are similar to the Appellant where it has been held that 10. Thus, unless the definition of ‘net wealth’ read with the definition of ‘asset’ as provided in section 2(m) and section 2(ea) respectively, include a building let out to a tenant used for commercial purposes, the same cannot be subjected to wealth-tax. Even if the assessee had included the same in his return, that will not preclude the assessee from claiming the benefit of law. There cannot be any estoppel against statute. A property, which is not otherwise taxable, cannot become taxable because of misunderstanding or wrong understanding of law by the assessee or because of his admission or on his misapprehension. If in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. Neither there can be any waiver of the right by the Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 23 of 26 assessee. The department cannot rely upon any such admission or misapprehension if it is not otherwise taxable. 11 This question was dealt with by this Court in Bhaskar Mitter’s case (supra). In this decision, this Court observed : \". . .An assessee is liable to pay tax only upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. The law empowers the ITO to assess the income of an assessee according to law and determine the tax payable thereon. In doing so, he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppel by conduct against law nor is there any waiver of the legal right as much as the legal liability to be assessed otherwise than according to the mandate of the law (sic). It is always open to an assessee to take the plea that the figure, though shown in his return of total income, is not taxable in law. . . .\" (p. 442) 12. Therefore, the building in question could not come within the definition of ‘asset’ as was held by the learned Tribunal affirming the decision of the Commissioner of Appeals and the Assessing Officer. Therefore, the order of the learned Tribunal cannot be sustained and is hereby set aside. The tax proposed to be imposed on the building let out to as commercial building to tenants, is not an asset within the meaning of section 2(ea), included in net wealth defined in section 2(m), respectively and, therefore, is not taxable under section 3 of the Wealth-tax Act for the assessment year 1993-94 32. In light of the judicial precedent cited above, together with the relevant statutory provisions and the factual matrix of the present case, it is humbly submitted that the addition made by the Learned Assessing Officer and CIT(A) is untenable both in law and on facts. The Appellant has clearly demonstrated that the property in question does not fall within the ambit of the term “asset” as defined under Section 2(ea) of the Act, and consequently, no liability arises under the Wealth-tax provisions. 33. Therefore, considering the binding nature of the aforesaid judgment, the bona fide conduct of the Appellant, and the absence of any legal or factual infirmity in the Appellant’s claim, we most respectfully pray that this Hon’ble Bench be pleased to allow the appeal and grant appropriate relief by deleting the impugned addition in toto. 34. We humbly submit that the appeal of the Assessee be allowed in the interest of justice and fairness, considering the facts and circumstances surrounding the case. Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 24 of 26 Therefore, it is prayed before this Honourable Tribunal that, considering the above submission of the Appellant, the appeal may be allowed.” 7. On the other hand, learned DR relied on the Order of lower authorities and submitted that during the course of reassessment proceedings, assessee did not submit any documents and even he did not file return of income. Therefore, AO was justified and he further submitted that in respect of property No.1, assessee entered into JDA on 05.04.2007. The arguments advanced by the learned Counsel that assessee was not the owner and the aforesaid properties were entered into JDA. Once the property was notified by the BDA in February 2003, construction cannot be done, then how assessee can enter into JDA. Therefore the submission of learned Counsel is not acceptable. Further, in respect of property No.2, gift deed was not registered with the Registrar of properties. Therefore, the submission of the assessee that property was gifted to his spouse is not acceptable. Merely filing of return of income arising from the land as rent received does not establish the fact that the owner of the land is his spouse. Ownership of the land is transferred when the gift deed itself is registered after making payment of required stamp duty. Assessee has not furnished any registered gift deed before the AO neither has submitted before the appellate authorities. More importantly, the land has not been transferred to his spouse. It was still in the name of the assessee. Therefore assessee is liable for wealth tax in the case of property-II. 8. Considering the rival submissions, we noted that here the dispute is regarding non-payment of wealth tax by the assessee for all the 4 years in respect of properties at Survey No.94/14, 96/1 and (property - 1) and 76/1 (property - 2) situated at Nagavara village, Kasaba Hobli, Bangalore North Taluk. The case was reopened by issue of notice under section 16 of the Act. However, assessee did not file return of income. The property is situated within the municipal area and it comes under the definition of assets under Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 25 of 26 section 2(ea) of the Wealth Tax Act. Properties No.I was notified for special purpose by BDA in February 2003 in respect of property No.1, assessee entered into JDA with Karle Property on 05.04.2007. The said property No.1 was denotified by BDA in June, 2014. Thereafter, the said property was sold to Karle Properties on 12.06.2015. On going through the submissions and arguments put forth before us that the property was converted from agriculture to non agriculture purpose in 1992 and entered into JDA on 05.04.2007, thereafter the property was acquired by BDA in Feb 2003. Since the property was acquired by BDA vide notification where the construction is not permitted. Therefore the property No.1 is out of purview of the definition of asset for the wealth tax liability. In view of this the case law relied on by the learned Counsel in para No.22 is fully applicable. Later on the property was denotified in the month of June 2014 when the earlier notification was lifted. Thereafter assessee became absolute owner of the property –I . Thereaftere, assessee is liable for payment of wealth tax on the said properties for the Assessment Year 2015-16 on the property No.1. Further in respect of property No.2 situated at Survey No.76/1 assessee submitted that property was gifted to his spouse and his spouse is receiving rent on the said property. His spouse had let out premises for commercial purposes and rent received was offered as income and paying tax regularly. However learned CWT(A) noted that the said property was not registered in the name of spouse. Therefore it cannot be said that ownership was transferred merely signifies gift deed and offering income in the hands of spouse only. The ownership was vested with the assesse. To prove the ownership the registration is required. We rely on the judgement og Hon’ble Apex Court in the case of Suraj Lamp& Industries Ltd. Vs State of Haryana reported in (2011) 14 taxmann.com 103 (SC) The property is not registered in the hands of donee. The absolute ownership wasnot transferred, no registered gift deed was produced. There is no dispute that property was used for commercial purposes. Therefore as per explanation of definition of assets as per section 2(e)(a)(i)(5) of the WTA, the alternate Printed from counselvise.com WTA Nos.1 to 4/Bang/2025 Page 26 of 26 arguments of the assessee that even after the above definition it is not considered as taxable asset. Therefore assessee is eligible for exemption from wealth tax on the property situated at Survey No.76/1. To sum up, WTA Nos.1 to 3/Bang/2025 for property No.1 is allowed and for WTA No.4/Bang/2025 is dismissed and for property No.2 situated at Survey No.76/1, for all 4 years are allowed. 9. In the result, appeals of the assessee in WTA No.4/Bang/2025 is partly allowed and other appeals are allowed. Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- (SOUNDARARAJAN K) (LAXMI PRASAD SAHU) Judicial Member Accountant Member Bangalore. Dated: 27.11.2025. /NS/* Copy to: 1. Appellants 2. Respondent 3. DRP 4. CIT 5. CIT(A) 6. DR,ITAT, Bangalore. 7. Guard file By order Assistant Registrar, ITAT, Bangalore. Printed from counselvise.com "