Sh. Rajesh Midha, Agra V. Asstt.Commissioner of Welth Tax, Circle-1, Agra

WTA 1/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0618 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 9 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 31-07-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Keywords: Benefit of exemption
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER WTA NO. 01/AGRA/2012 ASSTT. YEAR : 2007-08 RAJESH MIDHA, VS. A.C.W.T., CIRCLE-1, PROP. MIDHA ENTERPRISES, AGRA. NEAR NATH COMPLEX, DHAKRAN CROSSING AGRA. (PAN : AAYPM 9865 D). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY AGARWAL, C.A. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 19.02.2013 DATE OF PRONOUNCEMENT OF ORDER : 22.02.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 29.02.2012 FOR THE ASSESSMENT YEAR 2007- 08 ON THE FOLLOWING GROUNDS : 1. THE AO HAS INTERPRETED INCORRECTLY THE PROVISIO N MENTIONED IN PROVISO TO SECTION 5(VI) OF THE WEALTH TAX ACT, 1957. 2. THE HONBLE CIT(A) HAS NOT DECIDED THE QUESTIO N OF VALIDITY OF NOTICE U/S. 17 READ WITH SECTION 133(6) OF THE I NCOME TAX ACT. WTA NO.01/AGRA/2012 2 2. IN THIS CASE, AFTER FINDING THAT THE ASSESSEE HA S TAXABLE WEALTH, THE AO RECORDED THE REASONS U/S. 17 OF THE WEALTH TAX ACT, 1957 FOR INITIATING PROCEEDING TO ASSESS THE WEALTH OF THE ASSESSEE AND ISSUED NOT ICE U/S. 17. IN RESPONSE TO THE NOTICE ISSUED U/S. 17, THE ASSESSEE FILED WEALTH TA X RETURN DECLARING A NET WEALTH OF RS.14,31,700/-. AFTER EXAMINING THE DETAILS OF T HE PROPERTIES OF THE ASSESSEE AS DISCUSSED BY THE AO ON PAGE NO. 2 & 3 OF THE WEALTH TAX ORDER DATED 03.12.2010 UNDER APPEAL, THE AO FOUND THAT TWO PROPERTIES WHIC H HAVE BEEN CLAIMED EXEMPT U/S. 5(VI) OF THE ACT, ARE TAXABLE TO WEALTH TAX AN D THEREFORE, AFTER COMPUTING THE VALUE OF THESE TWO PROPERTIES AT CIRCLE RATE, HE AD DED THE SAME IN THE VALUE OF DECLARED WEALTH AND DETERMINED THE ASSESSED WEALTH OF ASSESSEE AS UNDER : I. VALUE OF TWO PROPERTIES DETERMINED AT CIRCLE RATE H ELD TO BE ASSESSABLE UNDER WEALTH TAX ACT, 1957: LAND AT 103-A 3/50, KHANDARI ROAD, HARIPARWAT RS. 19,70,000/- PLOT OF LAND AT KHASRA NO. 57, NEAR SIKANDRA RS. 8,78,430/- (RS.3500 X 250.93 SQ. MTR.) RS.28,48,430/- II. DETERMINATION OF TAXABLE WEALTH OF THE ASSESSEE : WEALTH AS DECLARED RS.14,31,700/- ADD: VALUE OF TWO PROPERTIES HELD TO BE TAXABLE UNDER WEALTH TAX ACT. RS.28,48,430/- RS.42,80,130/- WTA NO.01/AGRA/2012 3 AGAINST DETERMINATION OF THE ABOVE TAXABLE WEALTH B Y THE AO, THE ASSESSEE CHALLENGED THE ORDER OF THE AO IN GIVING INTERPRETA TION TO PROVISO TO SECTION 5(VI) OF THE W.T. ACT BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED IN THE APPELLATE ORDER IN WHICH THE ASSE SSEE CONTENDED THAT MARKET VALUE OF TWO URBAN PLOTS OF LAND ARE EXEMPT BEING M EASUREMENT BELOW 500 SQ. METERS EACH IN AREA. ACCORDING TO SECTION 5(VI), IT IS CLEAR THAT ONE ITEM OUT OF ONE HOUSE, PART OF HOUSE, PLOT OF LAND (OF ANY MEASUREM ENT) IS EXEMPT AND IN ADDITION TO ABOVE AS PER PROVISO, PLOT OF LAND UPTO 500 SQ. METER IS ALSO EXEMPT FROM LEVY OF WEALTH TAX. THEREFORE, NO WEALTH-TAX IS PAYABLE. TH E ASSESSEE MADE SIMILAR SUBMISSIONS BEFORE THE AO. THE ASSESSEE, THEREFORE, CONTENDED THAT SINCE BOTH THE PLOTS IN QUESTION ARE LESS THAN 500 SQ. METER, THES E PLOTS OF LAND WOULD NOT BE TAXABLE UNDER THE WEALTH-TAX ACT IN VIEW OF PROVISO TO SECTION 5(VI) OF THE W.T. ACT. THE REPORT FROM THE AO WAS CALLED IN WHICH IT WAS SUBMITTED THAT AS PER PROVISIONS OF SECTION 5(VI) OF THE WT ACT, ONLY ONE HOUSE OR PART OF HOUSE OR A PLOT OF LAND BELONGING TO ASSESSEE IS EXEMPT AND THE PRO VISO OF THIS SECTION HAS NO APPLICABILITY ON MORE THAN ONE PLOT OF LAND AND, TH EREFORE, THE AO WAS JUSTIFIED IN ADDING THE VALUE OF THESE TWO PLOTS OF LAND BECAUSE THE ASSESSEE HAD ALREADY BEEN GIVEN EXEMPTION FOR A HOUSE HELD BY HIM. THE LD. CI T(A) CONSIDERING THE FACTS OF THE CASE AND THE SUBMISSIONS OF BOTH THE PARTIES, C ONFIRMED THE ORDER OF THE AO AND WTA NO.01/AGRA/2012 4 DISMISSED THE APPEAL OF THE ASSESSEE. HIS FINDINGS IN THE APPELLATE ORDER IN PARA 7 IS REPRODUCED AS UNDER : 7. I HAVE CONSIDERED ALL THE FACTS RELATING TO THI S CASE AS DISCUSSED IN THE ASSESSMENT ORDER AS WELL AS IN THE WRITTEN SUBMISSION OF THE LD. AR AND IN THE REMAND REPORT OF THE AO AN D FURTHER REJOINDER FILED BY THE LD. AR. IN ORDER TO DECIDE T HIS MATTER, THE PROVISION OF SECTION 5(VI) OF THE ACT IS REPRODUCED AS UNDER : ONE HOUSE OR PART OF A HOUSE OR A PLOT OF LAND BE LONGING TO AN INDIVIDUAL FOR A HINDU UNDIVIDED FAMILY: PROVIDED THAT WEALTH-TAX SHALL NOT BE PAYABLE BY AN ASSESSEE IN RESPECT OF AN ASSET BEING A PLOT OF LAND COMPRISING AN AREA OF FIVE HUNDRED SQUARE METER OR LESS. ON ANALYZING THE ABOVE PROVISIONS, I FIND THAT THE PROVISO TO THIS SECTION IS ONLY QUANTIFYING THE PLOT OF LAND M ENTIONED IN THE MAIN PROVISION. IN THE MAIN PROVISION, EITHER OF THREE A SSETS HAVE BEEN EXEMPTED FROM WEALTH TAX BEING ONE HOUSE OR A PART OF A HOUSE OR A PLOT OF LAND AND THEN IT IS PROVIDED IN THE PROVISO THAT IN RESPECT OF AN ASSET BEING PLOT OF LAND WOULD BE EXEMPT, IF IT COM PRISES OF AN AREA OF 500 SQUARE METER OR LESS. IN MY CONSIDERED OPINION, THE INTERPRETATION GIVEN BY THE LD. AR THAT ANY NUMBER OF PLOTS OF LAN D, IF THEY ARE LESS THAN AN AREA OF 500 SQUARE METERS OR LESS WOULD BE EXEMPT IN ADDITION TO ONE HOUSE OR PART OF A HOUSE OR A PART OF LAND O F ANY MEASUREMENT DOES NOT APPEAR TO BE A CORRECT INTERPRETATION. IF SUCH INTERPRETATION IS TAKEN, NO LAND POSSESSED BY ANY ASSESSEE WOULD BE T AXABLE TO WEALTH TAX BY DIVIDING THE LAND INTO VARIOUS PLOTS OF A ME ASUREMENT OF AN AREA OF 500 SQUARE METERS OR LESS. HOWEVER, I DO NO T THINK THAT SUCH INTENTION WOULD HAVE BEEN OF LEGISLATURE WHILE MAKI NG THE PROVISIONS RELATING TO TAXING THE HOUSE PROPERTY AND LAND POSS ESSED BY ANY ASSESSEE FOR THE PURPOSES OF WEALTH TAX. THEREFORE, I AGREE WITH THE AO THAT THE PROVISO OF SECTION 5(VI) IS NOT APPLICA BLE ON MORE THAN ONE PLOT OF LAND. IN VIEW OF THE PROVISION OF SECTI ON 5(VI) READ WITH THE PROVISO, I AM ALSO OF THE CONSIDERED OPINION THAT O NLY ONE PLOT OF LAND IS EXEMPT FROM WEALTH TAX, IF IT IS LESS THAN OF AR EA OF 500 SQUARE METER BUT IF ONE HOUSE OR PART OF AN HOUSE HAS BEEN PROVI DED EXEMPTION FROM WEALTH TAX, NO FURTHER EXEMPTION WOULD BE PROV IDED ON ANY PLOT OF LAND. THEREFORE, CONSIDERING THAT THE ASSESSEE ( APPELLANT) HAS WTA NO.01/AGRA/2012 5 ALREADY BEEN PROVIDED EXEMPTION FROM WEALTH TAX ON HIS RESIDENTIAL HOUSE PROPERTY, THE AO HAS BEEN FOUND TO BE CORRECT IN BRINGING THE CIRCLE RATE VALUE OF BOTH THE PLOTS OF LAND FOR TAX ATION UNDER WEALTH TAX ACT AND THEREFORE, I CONFIRM THE ADDITION OF RS .28,48,430/- MADE IN THE TAXABLE WEALTH OF THE ASSESSEE (APPELLANT) A ND ACCORDINGLY, THE GROUND TAKEN BY THE ASSESSEE (APPELLANT) CHALLENGIN G THIS ADDITION IS DISMISSED. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A). ON THE OTHER HAND, THE LD. DR RELIED UP ON THE ORDERS OF THE AUTHORITIES BELOW. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW IN BRINGING THE VALUE OF TWO PLOTS IN QUESTION TO TAX UNDER THE WEALTH-TAX ACT. SECTIO N 5(VI) OF THE WEALTH-TAX ACT IS ALREADY REPRODUCED IN THE ORDER OF THE LD. CIT(A), WHICH HAS BEEN CORRECTLY INTERPRETED BY THE LD. CIT(A). IN THE MAIN PROVISIO N EITHER OF THE THREE ASSETS HAS BEEN EXEMPTED FROM WEALTH-TAX BEING ONE HOUSE OR A PART OF HOUSE OR A PLOT OF LAND AND THEN IT IS PROVIDED IN THE PROVISO THAT IN RESP ECT OF AN ASSET BEING PLOT OF LAND WOULD BE EXEMPT, IF IT COMPRISES OF AN AREA OF 500 SQ. METER OR LESS. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT ANY NUMBER OF PLOTS OF LAND, IF THEY ARE OF AREAS LESS THAN 500 SQ. METER OR LESS, WOULD BE EXEMPT IN ADDI TION TO ONE HOUSE OR PART OF HOUSE OR PLOT OF LAND OF ANY MEASUREMENT WOULD NOT BE THE CORRECT INTERPRETATION. IF THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE A RE ACCEPTED THEN EVERY PLOT OF WTA NO.01/AGRA/2012 6 LAND WITHIN 500 SQ. METER OR LESS WOULD BE EXEMPT D ESPITE THE ASSESSEE HAS ALREADY TAKEN BENEFIT OF ONE HOUSE OR PART OF HOUSE OR A PL OT OF LAND UNDER THE MAIN PROVISION OF SECTION 5(VI) OF THE WT ACT. SUCH IS N OT THE INTENTION OF THE LEGISLATURE. THE LD. CIT(A), THEREFORE, RIGHTLY AGR EED WITH THE AO THAT PROVISO TO SECTION 5(VI) IS NOT APPLICABLE ON MORE THAN ONE PL OT OF LAND. ACCORDING TO THE ABOVE PROVISION, THREE DIFFERENT TYPES OF PROPERTIE S ARE MENTIONED, I.E., ONE HOUSE OR PART OF HOUSE OR A PLOT OF LAND COMPRISING OF AR EA OF 500 SQ. METER OR LESS WOULD BE EXEMPT. THEREFORE, ONCE THE BENEFIT IS GIVEN TO THE ASSESSEE OF EXEMPTION ON ONE HOUSE (RESIDENTIAL HOUSE PROPERTY EXEMPTED BY T HE AO), NO FURTHER BENEFIT WOULD BE EXTENDED TO OTHER PART OF HOUSE OR A PLOT OF LAND. THE WORD OR HAS BEEN USED IN SECTION 5(VI) OF THE IT ACT, WOULD CLEARLY PROVE THAT EITHER OF THE THREE ITEMS WOULD BE EXEMPT AND SINCE IN THE CASE OF ASSE SSEE, THE ASSESSEE HAS ALREADY TAKEN BENEFIT OF EXEMPTION OF RESIDENTIAL HOUSE PRO PERTY, THEREFORE, NO FURTHER BENEFIT WOULD BE EXTENDED IN THE CASE OF ASSESSEE. IN RESPECT OF PLOT OF LAND, THE MEASUREMENT SHOULD BE LESS THAN 500 SQ. METER OR LE SS, BUT IT WOULD NOT PROVIDE THAT ALL PLOTS OF LAND HAVING AREA OF 500 SQ. METER OR LESS WOULD ALWAYS BE EXEMPTED WHEN THE ASSESSEE HAS TAKEN BENEFIT OF EXE MPTION ON RESIDENTIAL HOUSE PROPERTY. THE LD. CIT(A) ON PROPER APPRECIATION AND PROPER INTERPRETATION OF THE ABOVE PROVISION CORRECTLY DISMISSED THE APPEAL OF T HE ASSESSEE. THERE IS NO CHALLENGE TO THE VALUATION OF PROPERTY FOR THE PURP OSE OF WEALTH-TAX. THOUGH THE WTA NO.01/AGRA/2012 7 ASSESSEE HAS ALSO RAISED VALIDITY OF REOPENING OF A SSESSMENT U/S. 17 OF THE WT ACT FOR WEALTH ESCAPING ASSESSMENT, BUT THE LD. COUNSEL FOR THE ASSESSEE DID NOT ARGUE ON THIS GROUND. THEREFORE, THE SAME IS ALSO LIABLE TO BE DISMISSED AND FURTHER WHEN THERE WAS SPECIFIC MATERIAL AVAILABLE WITH THE AO, REOPENING OF THE WEALTH TAX ASSESSMENT IS JUSTIFIED IN THE MATTER. THE LD. COUN SEL FOR THE ASSESSEE ALSO FILED ORDER OF ITAT, AGRA BENCH IN THE CASE OF UDIT NARAI N AGARWAL VS. DCWT DATED 27.04.2012 IN WTA NO. 01/AGRA/2011 IN WHICH THE FAC TS ARE ALTOGETHER DIFFERENT AND THE ISSUE OF NUMBER OF PROPERTIES HAS NOT BEEN CONSIDERED. THEREFORE, IT WOULD NOT APPLY TO THE FACTS OF THE CASE. CONSIDERING THE ABOVE DISCUSSION, THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. THE SAME IS AC CORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. 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