Devineni Lakshmi Wife & Legal, Vijayawada V. The ITO, Vijayawada

WTA 22/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3911 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Keywords: Corroborative evidences

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI D MANMOHAN , VICE PRESIDENT & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER W . T .A.NO S . 20 - 22 /VIZ/ 201 7 ( / ASSESSMENT YEAR S : 20 08 - 09 AND 2009 - 10 ) DEVINENI AVINASH D.NO.48 - 4 - 16 GUNADALA VIJAYAWADA DEVINENI LAKSHMI LEGAL REP. O F LATE SRI DENIVENI RAJASEKHAR D.NO.48 - 4 - 16 GUNADALA VIJAYAWADA [PAN :AWLPD6365N] VS. WEALTH TAX OFFICER WARD - 2(3) VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI C.SUBRAHMANYAM, AR / RESPONDENT BY : SHRI B.C.S.NAIK, DR / DATE OF HEARING : 06 . 12 .2017 / DATE OF PRONOUNCEMENT : 08 .1 2 .2017 2 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : TH E S E APPEAL S ARE FILED BY THE ASSESSEE AGAINST THE ORDER S OF THE COMMISSIONER OF WEALTH TAX (APPEALS) [C W T(A)], VIJAYAWADA DATED 14 . 12 .201 6 FOR THE ASSESSMENT YEAR S 20 08 - 09 AND 2009 - 10 . SINCE THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON , ALL THE APPEALS ARE CLUBBED , HEARD TOGETHER AND DISPOSED OFF IN A COMMON ORDER FOR THE SAKE OF CONVENIENCE AS UNDER . 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1.0 . THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDERS PASSED U/S.16(3) R.W.S 17 OF THE WEALTH TAX ACT, 1957 ARE CONTRARY TO THE FACTS OF THE CASE AND PROVISIONS OF LAW. 1.1 . THE LEARNED COMMISSIONER OF WEALTH TAX(A)(IN SHORT 'CWT(A)') ERRED IN OBSERVING THAT THE VACANT LAND SITUATED IN SHEIKPET HYDERABAD IS LIABLE FOR WEALTH TAX WHEN THE SAME IS H ELD BY THE ASSESSEE AS HIS STOCK - IN - TRADE. 1.2 . THE LEARNED CWT(A) OUGHT TO HAVE HELD THAT THE SUBJECT LAND_ IS A BUSINESS ASSET/STOCK - IN - TRADE WHICH THE ASSESSEE CAN HOLD FOR 10 YEARS FROM THE DATE OF PURCHASE, THEREFORE, THE SAME IS NOT LIABLE FOR WEALT H TAX. 1.3 . THE LEARNED CWT(A) OUGHT TO HAVE CONSIDERED THE EVIDENCE ON RECORD I.E THE DEVELOPMENT AGREEMENT ENTERED, WHICH GOES TO PROVE THAT THE ASSESSEE HAS PURCHASED THE LAND FOR THE PURPOSE OF BUSINESS EXPLOITATION AND TILL SUCH TIME THE ASSET IS HELD IN STOCK - 3 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA I N - TRADE. THIS VITAL ASPECT WAS BRUSHED ASIDE IN A CASUAL AND SUMMARY MANNER. 1.4 . THE LEARNED CWT(A) OUGHT TO HAVE KNOWN THAT THE TITLE OF THE PROPERTY (LAND AT SHEIKPET, HYDERABAD) IS UNDER LITIGATION, EVEN DURING THE IMPUGNED ASST. YEAR, MATTER PENDING IN A CITY CIVIL COURT IN O.S.N0F248 OF 2003 WITH AN INJUNCTION ORDER TO MAINTAIN THE STATUS - QUO TILL FURTHER ORDERS. IN AS MUCH AS THE ASSESSEE IS PREVENTED FROM CARRYING OUT CONSTRUCTION OF THE BUILDING, THEREFORE, THE SUBJECT LAND IS NOT COMING WITHIN TH E DEFINITION OF ASSET U/S.2(EA) OF THE WT.ACT. 1.5 . THE LEARNED CWT(A) IS NOT CORRECT BY NOT FOLLOWING THE DECISION OF THE JURISDICTIONAL BENCH HON'BLE ITAT VISAKHAPATNAM IN THE CASE OF SRI DEVINENI AVINASH WTA NO.1/V/2015 FOR THE ASST. YEAR 2009 - 10 WHER EIN UNDER SIMILAR CIRCUMSTANCES THE HON'BLE BENCH HELD THE SUBJECT PROPERTY IS OUTSIDE THE DEFINITION OF ASSET U/S.2(EA) OF THE W.T.ACT. THIS WAY THE LEARNED CWT(A) FAILED TO MAINTAIN THE JUDICIAL DISCIPLINE. 1.6 . THE LEARNED CWT(A) PASSED THE ORDER ON THE ERRONEOUS CONSIDERATION OF THE MATTER BY ASSUMING THAT THE ASSESSEE WAS NOT A PARTY TO THE SUIT IN O.S.NO.248 OF 2003. INFACT THE LEARNED CWT(A) IF HE HAS GONE THROUGH THE COURT JUDGMENT HE WOULD NOT HAVE MADE SUCH WRONG OBSERVATION AND HE WOULD NOT HAVE TAKEN AN ADVERSE DECISION ON THE ISSUE. 1.7 . THE OBSERVATIONS OF THE LEARNED CWT(A) AT PARA - 6.3 IS CONTRARY TO THE PROVISIONS OF LAW, FACTS OF THE CASE. THE RELIANCE PLACED ON THE DECISION OF ITAT AMRITSAR BENCH REPORTED IN (2006) 97 LTD 482(ASR) TO SUPPORT HIS ADVERSE VIEW IS OUT OF CONTEXT SINCE THE DECISION SUPPORTS THE CASE OF THE ASSESSEE. 1.8 . FOR THESE AND OTHER REASONS THAT ARE TO BE URGED AT THE TIME OF HEARING OF THE CASE THE APPELLANT PRAYS THAT THE ORDERS PASSED BY THE LEARNED CWT(A) IS CONTRARY TO THE PROVISIONS OF LAW AND FACTS OF THE CASE AND THE SAME NEEDS TO BE QUASHED IN THE INTEREST OF JUSTICE. 4 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA 3. GROUND NO.1.0 IS NOT PRESSED BY THE ASSESSEE, THEREFORE, GROUND NO.1.0 IS DISMISSED AS NOT PRESSED. 4. GROUND NO.1.8 IS GENERAL IN NATURE WHICH DO ES NOT REQUIRE SPECIFIC ADJUDICATION. 5 . FOR THE SAKE OF CONVENIENCE FACTS ARE REPRODUCED FROM THE FILE OF DEVINENI AVINASH. THE ASSESSEE FILED RETURN OF WEALTH ON 17.09.2010 DECLARING NET WEALTH AT RS.NIL FOR THE A.Y.2008 - 09. THE ASSESSMENT WAS COMPLETED U/S 16(3) R.W.S. 17 OF WEALTH TAX ACT ON TOTAL NET WEALTH OF RS.6,47,28,860/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) COMPUTED THE NET WEALTH AS UNDER : 1. PROPERTY AT ENIKEPADU RS. 7,50,000 2. PR OPERTY AT SHAMEERPET RS. 6,43,860 3. PROPERTY AT SHAIKPET RS.6,33,35,000 4. PROPERTY AT GUNADALA & ITI BUS STOP RS. NIL 5. MOVABLE PROPERTIES RS. NIL ------------------------------- TOTAL WEALTH ASSESSED RS.6,47,28,860 ---- ---------------------------- 6 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CWT(A) AND THE LD.CWT(A) ALLOWED THE APPEAL OF THE ASSESSEE 5 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA PARTLY AND CONFIRMED THE ADDITION MADE BY THE AO RELATING TO PROPERTIES AT SHEIKPET, BAN JARAHILLS, HYDER A BAD . THE ASSESSEE S HA VE ACQUIRED 1195 SQ.YDS OF HOUSE SITE AT SHAIKPET VILLAGE, THE VALUE OF WHICH WAS SHOWN AT RS.5,97,50,000/ - . DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED BEFORE THE AO THAT THE PROPERTY IN QUESTION WAS ST OCK IN TRADE AS PER THE DEVELOPMENT AGREEMENT ENTERED IN TO WITH VULCON PROJECT DEVELOPERS PVT. LTD AND ARGUED THAT PROPER T Y IS EXEMPT FROM WEALTH TAX. HOWEVER, THE AO FOUND FROM THE INCOME TAX RETURN S THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME IN ITR - 2 DECLARING INCOME FROM HOUSE PROPERTY AND NEITHER DONE ANY BUSINESS NOR DECLARED ANY INCOME FROM BUSINESS. HENCE, THE AO HELD THAT THE PROPERTY IS NOT BUSINESS ASSET AND LIABLE FOR WEALTH TAX. ACCORDINGLY CALLED FOR THE INFORMATION FRO M THE JOINT SUB REGISTRAR - 1, HYDERABAD, AND DETERMINED THE VALUE OF PROPERTY AT RS.6,33,35,000/ - IN THE CASE OF DEVINENI AVINASH AND LATE RAJA SEKHAR FOR THE A.Y.2008 - 09 AND FOR THE A.Y. 2009 - 10 DETERMINED THE VALUE OF THE PROPERTY AT RS.7,17,00,000/ - AND TREATED AS WEALTH OF THE ASSESSEE. 7 . AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CWT(A) AND ARGUED THAT THE PROPERTY IN QUESTION WAS STOCK - IN - TRADE AND REQUIRED TO BE EXCLUDED FROM THE COMPUTATION OF THE NET WEALTH. 6 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA THE CW T(A) OBSERVED THAT THE PROPERTY IN QUESTION WAS URBAN VACANT LAND LOCATED AT BANJARA HILLS, HYDERABAD AND THE LAND WAS PURCHASED ON 30. 07.2007 . T HOUGH THE MOU WAS ENTERED WITH M/S VULCON PROJECT DEVELOPE RS PRIVATE LTD. ON 31.07.2007, T ILL THE RELEVANT VALUATION DATE I.E ON 31.03.2008, THE LAND REMAINED VACANT LAND AND NO CONSTRUCTION OR DEVELOPMENT ACTIVITY TOOK PLACE. CWT(A) F URTHER, OBSERVED THAT THE ASSESSEE DECLARED THE ASSET IN THE BALANCE SHEET AS ON 31.03.2008 FOR INCOME TAX PURPOSES AS FIXED AS SET (INVESTMENT ONLY)AND THE ASSESSEE IS NEITHER IN THE BUSINESS OF PURCHASE AND SALE OF LAND NOR OFFERE D ANY INCOME FROM ANY BUSINESS AND THE CLAIM OF THE ASSESSEE THAT THE ASSET IS STOCK IN TRADE IS NOT SUPPORTED BY ANY EVIDENCE. AS PER THE DETAILS FURNISHED BY THE ASSESS EE, PROPERTY WAS PURCHASED ON 30.07.2007 AND AS ON 31.03.2008, THE PROPERTY WAS SHOWN AS FIXED ASSET IN THE RETURN OF INCOME WHICH INDICATED THAT THE ASSESSEE NEITHER CONVERTED INTO BUSINESS ASSET NOR ANY CONSTRUCTION ACTIVIT Y TOOK PLACE IN THE RELEVANT PERIOD. THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, FOR THE ASSESSMENT YEAR 2009 - 10 IN WTA NO.1/VIZAG/2015 DATED 10.06.2016 HELD THAT THE ASSET IS STOCK IN TRADE, ACCORDINGLY UPHELD THE ACTION OF THE AO IN TREATING THE ASSET AS TAXABLE ASSET . 7 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA 8. DURING THE APPEAL PROCEEDINGS, BEFORE THE CWT(A) , THE ASSESSEE RAISED ALTERNATE PROPOSITION STATING THAT THE SUBJECT PROPERTY WAS IN LITIGATION AND THE CITY COURT HAS GRANTED INTERIM INJUNCTION ORDER IN O S NO.248 OF 2003 PROHIBITING THE ASSESSEE TO MAKE ANY STRUCTURES AND THE CITY CIVIL COURT HAS DIRECTED TO MAINTAIN STATUS QUO TILL FURTHER ORDERS. HENCE, THE LD.AR ARGUED BEFORE THE CWT(A) THAT DUE TO INJU N CTION ORDER OF CIVIL COURT IN O.S.NO.248 OF 2003, CONSTRUCTION OF BUILDING IS NOT PERMISSIBLE AND THE LAND SHOULD NOT BE TREATED AS URBAN LAND WITHIN THE MEANING OF ASSET U/S 2(EA) OF WEALTH TAX ACT. THE CWT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSE E . T HOUGH THE DECISION OF THE TRIBUNA L WAS IN FAV OUR OF THE ASSESSE E , CWT(A) HELD THAT UNLESS THERE IS A COMP L ETE RESTRICTION OR PROHIBITION OF THE BYE - LAW , THE LAND CANNOT BE EXCLUDED FROM THE PURVIEW OF SECTION 2(EA) OF WEALTH TAX ACT. FURTHER, THE CWT(A) OBSERVED THAT THERE IS NO PROHIBITION OF CONST RUCTION OF BUILDING IN THE ARE A DUE TO OPERATION OF ANY LAW, EXCEPT THE INJUNCTION ORDERS DUE TO DISPUTES HENCE, THE INTERIM ORDERS ISSUED BY THE CITY CIVIL COURT CANNOT BE EQUATED WITH THE LAW IMPOSING PROHIBITION. ACCORDINGLY, THE CWT(A) HELD THAT THE A O RIGHTLY ASSESSED THE VALUE OF PROPERTY AT RS.6,33,35,000/ - TO WEALTH TAX. 8 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA 9. AGGRIEVED BY THE ORDER OF THE CWT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 10. GROUND NO.1.1 TO 1.3 ARE RELATED TO THE TREATMENT OF ASSET AS STOCK IN TRADE. ACCORDING TO THE LD.AR, THE VACANT LAND IN BANJARA HILLS IS NOT ASSESSABLE F OR WEALTH TAX SINCE THE SAME IS HELD BY THE ASSESSEE AS STOCK IN TRADE. THE ASSESSEE IS PERMITTED TO HOLD THE ASSET AS STOCK IN TRADE FOR 10 YEARS FROM THE DATE OF PURCHASE, THE LD.AR FUR T HER SUBMITTED THAT THE DEVELOP MENT AGREEMENT WHICH GOES TO PROVE THAT THE ASSESSEE HAS PURCHASED THE LAND FOR THE PURPOSE OF BUSINESS EXPLOITATION AND TILL SUCH TIME T HE ASSET IS HELD AS STOCK IN TRADE THE SAME SHOULD BE TREATED AS BUSINESS ASSET AND CANNOT BE BRUSHED ASIDE IN A CASUAL MANNER. ACCORDINGLY, LD. AR ARGUED THAT THE ASSET IS STOCK IN TRADE AND REQUIRED TO BE EXCLUDED FROM THE WEALTH TAX PURPOSE. ON THE OTH ER HAND THE LD.DR SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLAC ED ON RECORD. THE ASSESSEE HAS PURCHASED URBAN VACANT LAND LOCATED AT BANJARA HILLS AND ENTERED IN TO DEVELOPMENT AGREEMENT WITH VULCON PROJECT 9 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA DEVELOPERS PVT. LTD FOR DEVELOPMENT OF THE LAND BUT NO DEVELOPMENT TOOK PLACE TILL THE DATE OF VALUATION DATE. THE ASSESSE E DECLARED THE ASSET IN THE BA LANCE SHEET AS A FIXED ASSET AND NO SUPPORTING EVIDENCE WAS PLACED BY THE ASSESSEE WITH REGARD TO THE CLAIM OF THE ASSESSEE AS STOCK IN TRADE. THE PROPERTY WAS NOT CONVERTED AS A BUSINESS ASSET IN THE RELEVANT PERIOD. ON IDENTICAL FACTS IN THE CASE OF DE VINENI AVINASH FOR THE A.Y.2009 - 10, THE COORDINATE BENCH OF ITAT VIZAG IN WTA NO.1/VIZAG/2015 DATED 10.06.2016 HELD THAT THE ASSET IS AN INVESTMENT BUT NOT STOCK IN TRADE. FOR READY REFERENCE, WE EXTRACT THE RELEVANT PARAGRAPHS OF THE ITATS ORDER WHICH R EADS AS UNDER : 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTUAL MATRIX OF THE CASE WHICH LEADS TO LEVY OF WEALTH TAX IS THAT ASSESSEE HAS PURCHASED A LAND ON 30.7.2007 AND ON THE NEXT DAY A MOU WAS ENTERED INTO WITH THE DEVELOPER FOR DEVELOPING THE SAID LAND. THE A.O. WAS OF THE OPINION THAT THE LAND HELD BY THE ASSESSEE IS COMING UNDER THE DEFINITION OF URBAN LAND AS DEFINED U/S 2(EA) OF THE ACT. THE A.O. FURTHER WAS OF THE OPIN ION THAT THE ASSESSEE HAS PURCHASED THE LAND AS AN INVESTOR WHICH WAS PROVED BY HIS CONDUCT THAT HE HAD DISCLOSED THE SAID ASSET TO THE DEPARTMENT AS INVESTMENT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE LAND HELD BY HIM IS STOCK IN TRADE WHICH IS KEP T OUTSIDE THE PURVIEW OF THE DEFINITION OF ASSET U/S 2(EA) OF THE ACT. THE ASSESSEE FURTHER CONTENDED THAT HE HAD PURCHASED THE LAND FOR THE PURPOSE OF COMMERCIAL EXPLOITATION WHICH WAS EVIDENCED BY THE FACT THAT HE HAD ENTERED INTO A JDA ON THE NEXT DAY OF THE PURCHASE OF LAND, THEREFORE, IT CANNOT BE CONSIDERED AS ASSET FOR THE PURPOSE OF WEALTH TAX. IT WAS FURTHER CONTENDED THAT JUST BECAUSE HE HAS DISCLOSED THE SAID LAND IN THE STATEMENT OF AFFAIRS FILED BEFORE THE DEPARTMENT UNDER IMMOVABLE PROPERTIE S WOULD NOT ALTER THE CHARACTER OF LAND. WHAT IS IMPORTANT IS THE PURPOSE FOR WHICH IT WAS PURCHASED. THE A.O. NOT DENIED THE FACT THAT THE ASSESSEE HAS ENTERED INTO A JDA. THE A.O. SIMPLY WAS OF THE OPINION THAT THE ASSESSEE PURCHASED THE LAND AS AN IN VESTOR, THEREFORE, IT CANNOT BE CONSIDERED AS STOCK IN TRADE. 10 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA 7. THE ONLY ISSUE THAT CAME UP FOR OUR CONSIDERATION IS WHETHER THE LAND HELD BY THE ASSESSEE IS AN URBAN LAND COMING WITHIN THE DEFINITION OF ASSET AS PER SECTION 2(EA) OF THE ACT OR IS A STO CK IN TRADE, WHICH IS KEPT OUTSIDE THE DEFINITION OF ASSET. IT IS THE CONTENTION OF THE ASSESSEE THAT THE LAND HELD BY HIM IS A STOCK IN TRADE, THEREFORE, IT CANNOT BE CONSIDERED AS AN ASSET. WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE HIMSELF HAS ADMITTED THAT HE HAD PURCHASED THE LAND AS AN INVESTOR. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS FILED A STATEMENT OF AFFAIRS BEFORE THE ASSESSING OFFICER AND CLAIMED THAT THE IMPUGNED LAND IS AN IMMOVABL E PROPERTY. JUST BECAUSE LAND IS UNDER JOINT DEVELOPMENT, IT CANNOT BE CONSIDERED THAT THE ASSET IS HELD FOR THE PURPOSE OF COMMERCIAL EXPLOITATION THEREBY IT IS CLASSIFIED AS STOCK - IN - TRADE. THE ASSESSEE HAS FAILED TO PROVE THAT THE IMPUGNED LAND IS STOC K - IN - TRADE WITH ANY EVIDENCES. ON THE OTHER HAND, THE INCOME TAX RETURN FILED FOR THE ASSESSMENT YEAR 2009 - 10 IN ITR FORM - 2 WHICH IS MEANT FOR INDIVIDUAL AND HUFS NOT HAVING INCOME FROM BUSINESS OR PROFESSION, ABUNDANTLY PROVES THAT THE ASSESSEE IS NOT IN VOLVED IN ANY BUSINESS. BY HIS CONDUCT, THE ASSESSEE PROVED THAT HE IS NOT INTO THE BUSINESS EITHER IN THE PAST OR IN THE FUTURE. IF THE JDA IS ENTERED FOR DEVELOPMENT OF THE PROPERTY, IT IS FOR THE BUILDER WHO COMES UNDER THE ACTIVITY OF BUSINESS BUT NO T THE ASSESSEE. THE ASSESSEE HAS PURCHASED THE LAND AS AN INVESTOR, CONSEQUENTLY ANY GAINS FROM THE LAND WOULD BE ASSESSABLE UNDER THE HEAD INCOME FROM CAPITAL GAINS. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS FAILED TO PROVE THAT THE IMPUGNED L AND HELD BY HIM IS STOCK - IN - TRADE. 11.1. AS THE FACTS OF THE CASE ARE IDENTICAL, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE COORDINATE BENCH IN THE CASE CITED SUPRA, WE HOLD THAT THE ASSET IS NOT STOCK IN TRADE AS CLAIMED BY THE ASSESSEE AND THE ASSESS EES APPEAL ON THIS ISSUE IN GROUND NO. 1.1. TO 1.3 ARE DISMISSED. 12. GROUND NOS. 1.4 TO 1.7 ARE RELATED TO THE LITIGATION ON THE PROPERTY BEFORE THE HONBLE CIVIL COURT IN OS NO.248 OF 2003 WITH AN INJUNCTION ORDER TO MAINTAIN STATUS QUO TILL FURTHER OR DERS. THE LD.AR WAS OF THE VIEW 11 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA THAT DUE TO INJU N CTION ORDER ISSUED BY THE HONBLE CITY CIVIL COURT THE ASSESSEE IS PREVENTED FROM CARRYING OUT CONSTRUCTION OF BUILDING OR THE DEVELOPMENT , THEREFORE, TH E SUBJECT LAND IS NOT COMING WITHIN THE DEFINITION OF ASSET U/S 2(EA) OF WEALTH TAX ACT. HENCE, REQUESTED TO CONSIDER FOR EXCLUSION OF WEALTH WITHIN THE DEFINITION OF SECTION 2(EA) OF WEALTH TAX ACT. 13. WE HAVE CONSIDERED THE ARGUMENTS OF THE BOTH THE P ARTIES AND PERUSED THE MATERIAL PLA C ED ON RECORD. THE ABOVE ISSUE HAS BEEN CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASSESSEE IN WTA 1 OF 2017 DATED 07.09.2017 AND THE ISSUE IS DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE R EVENUE. FOR THE SAKE OF CONVENIENCE AND CLARITY, WE EXTRACT RELEVANT PARAGRAPH OF THE ORDER HONBLE JURISDICTIONAL HIGH COURT CITED SUPRA. 6. THE FIRST QUESTION OF JAW THAT ARISES FOR CONSIDERATION IS AS TO WHETHER THE PROPERTY AT SHAIKPET, HYDERABAD , DESPITE BEING AN URBAN LAND, CAN BE HELD TO BE NOT AN ASSET WITHIN THE MEANING OF SECTION 2(EA) OF THE ACT. 7. SECTION 2(EA) OF THE ACT DEFINES THE EXPRESSION 'ASSETS' IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1 DAY OF APRIL, 1993 OR ANY SUBS EQUENT ASSESSMENT YEAR, AS FOLLOWS: 2(EA) 'ASSETS' IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 1993, OR ANY SUBSEQUENT ASSESSMENT YEAR, MEANS 12 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA (I) ANY BUILDING OR LAND APPURTENANT THERETO (HEREINAFTER REFERRED TO AS 'HOUSE), WHETHER USED FOR THE PURPOSE OF MAINTAINING A GUEST HOUSE OR OTHERWISE INCLUDING A FARM HOUSE SITUATED WITHIN TWENTY - FIVE KILOMETERS 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 (TEN LAKH RUPEES); (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); (III) JEWELLERY; BULLION AND FURNITURE, UTENSILS OR ANY OTHER ARTICLE MADE WHOLLY OR PARTLY OF GOLD, SILVER, PLATINUM OR ANY OTHER PRECIOUS METAL OR ANY ALLOY CONTAINING ONE OR MORE OF SUCH PRECIOUS METALS: PROVIDED THAT WHERE ANY OF THE SAID ASSETS IS USED BY THE ASSESSEE AS STOCK - N - TRADE, SUCH ASSET SHALL BE DEEMED AS EXCLUDED FROM THE ASSETS SPECIFIED IN THIS SUB - CLAUSES (IV) YACHTS, BOATS AND AIRCRAFT (OTHER THAN THOSE USED BY THE ASSESSEE FOR COMMERCIAL PURPOSES); (V) URBAN LAND; (VI) CASH IN HAND, IN EXCESS OF FIFTY THOUSAND RUPEES, OF AND HINDU - UNDIVIDED FAMILIES AND IN THE CASE OF OTHER PERSONS ANY AMOUNT NOT RECORD ED IN THE BOOKS OF ACCOUNT EXPLANATION - 1, FOR THE PURPOSES OF THIS CLAUSE, - (A) 'JEWELLERY' INCLUDES - - 13 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA (I) ORNAMENTS MADE OF GOLD, SILVER, PLATINUM OR ANY OTHER (I) PRECIOUS METAL OR ANY AY CONTAINING ONE OR MORE OF SUCH PRECIOUS METALS, WHETHER OR NOT CONTAINING ANY PRECIOUS OR SEMI - PRECIOUS STONES AND WHETHER OR NOT WORKED OR SEWN INTO ANY WEARING APPAREL; - (II) PRECIOUS OR SEMI - PRECIOUS STORES, WHETHER OR NOT SET IN ANY FURNITURE, UTENSILS OR OTHER ARTICLE OR WORKED OR SEWN INTO ANY SEARING APPARE L ; (B) 'URBAN AND' MEANS LAND SITUATE - (I) IN ANY AREA WHICH IS C O MPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY (WHETHER KNOWN AS MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE , TOWN COMMITTEE, OR BY ANY OT HER NAME) OR A CANTONMENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAND; OR (II) IN ANY AREA WITHIN THE DISTANCE, MEASURED AER I ALLY - (I) NOT BEING MORE THAN TWO KILOMETERS , FROM THE, LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT HOARD REFERRED TO IN SUB - CLAUSE (I) AND WHICH HAS A POPULATION OF MORE THAN TEN THOUSAND BUT NOT EXCEEDING ONE LAKH ; OR (II) NOT BEING MORE THAN SIX KILOMET E RS , FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN SUB - CLAUSE (I) AND WHICH HAS A POPULATION OF MORE THAN ONE IAKH BUT NOT EXCEEDING TEN LAKB; OR (III) NOT BEING , MORE THAN EIGHT KILOMETERS, FROM THE LOCAL REFERRED TO IN SUB - CLAUSE (C) AND WHICH HAS A POPULATION OF MORE THAN TEN LAKH, BUT DOES NOT INCL UDE 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 AUTHOR ITY OR ANY UNUSED LAND HELD BY THE ASSESSES FOR INDUSTRIAL PURPOSES TAR A PERIOD OF TWO YEARS FROM THE DATA OF ITS ACQUSIT1ON 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. EXPLANATION, -- FOR THE PURPOSES OF CLAUSE (B) OF EXPLANATION 1, POPULATION' MEANS THE POPULATION ACCORDING TO THE LAST PRECEDING 14 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE DATE OF VALUATION. EXPLANATION 2 - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARE THAT 'JEWELLERY' DOES NOT INCLUDE THE GOLD DEPOSIT BONDS ISSUED UNDER THE GOLD DEPOSIT SCHEME, 1999 NOTIFIED BY THE CENTRAL GOVERNMENT.' 8. IT CAN BE SEEN FROM THE DEFINITION EXTRACTED ABOVE THAT AN URBAN LAND SQUARELY COMES W ITHIN THE MEANING OF THE EXPRESSION 'ASSETS' UNDER SECTION 2(EA). EXPLANATION - 1 TO SECTION 2(EA) DEFINES 'URBAN LAND' TO MEAN A LAND SITUATE IN ANY AREA COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY, CORPORATION ETC. BUT CERTAIN LANDS ARE EXCLUDED FR OM THE DEFINITION OF THE EXPRESSION 'URBAN LAND'. UNDER EXPLANATION - 1(B) OF SECTION 2(EA) THE LAND ON WHICH CONSTRUCTION OR A BUILDING IS NOT PERMISSIBLE UNDER ANY LAW FOR THE TIME BEING IN FORCE IN THE AREA IN WHICH SUCH LAND IS SITUATED, IS EXCLUDED FROM THE PURVIEW OF THE DEFINITION. THE LANGUAGE USED IN EXPLANATION - L(B) IS CRYSTAL CLEAR TO THE EFFECT THAT WHAT IS EXCLUDED IS ONLY LAND ON WHICH CONSTRUCTION OF A BUILDING IS NOT PERMISSIBLE UNDER ANY LAW FOR THE TIME BEING IN FORCE IN THE AREA IN WHICH SU CH LAND IS SITUATED. 9. IN THE CASE ON HAND, THERE WAS A PRIVATE PROPERTY DISPUTE WHICH LED TO THE FILING OF A CIVIL SUIT IN O.S..NO.248 OF 2003. IN THAT PRIVATE PROPERTY DISPUTE THERE WAS AN INTERIM ORDER TO MAINTAIN STATUS QUO PASSED BY THE CIVIL COURT. THEREFORE, SUCH AN INTER IM ORDER OF STATUS QUO PASSED BY A CITY CIVIL COURT PROHIBITING THE ASSESSEE FROM PUTTING UP A CONSTRICTION TILL THE RESOLUTION OF THE PRIVATE PROPERTY DISPUTE, DOES NOT TANTAMOUNT TO PROHIBITION 'UNDER ANY LAW FOR THE TIME BEING IN FONT IN THE AREA IN WH ICH SUCH LAND IS SITUATED.' 10. THEREFORE THE TRIBUNAL WAS COMPLETELY WRONG IN THINKING THAT WHEREVER SOME INTERIM ORDERS OF PROHIBITION HAVE BEEN PASSED IN A PRIVATE PROPERTY DISPUTE, THE SAME WOULD ALSO FALL UNDER EXCLUSION UNDER EXPLANATION - 1(B). HENC E, BOTH THE QUESTIONS OF LAW ARE LIABLE TO BE ANSWERED IN FAVOUR OF THE APPELLANT/REVENU E . 14. RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT, WE HOLD THAT THE LAND IN QUESTION CANNOT BE EXCLUDED FROM THE DEFINITION OF ASSET FROM THE DEFINITION OF SECTION 2(EA) OF WEALTH TAX ACT AND CWT(A) HAS RIGHTLY DIRECTED THE AO TO HO LD THAT THE SAME REQUIRED TO BE 15 W TA NO S.20 - 22/VIZ/2017 DEVINENI AVINASH, DEVINENI LAKSHMI, VIJAYAWADA BROUGHT TO WEALTH TAX PURPOSE. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CWT(A) AND DISMISS THE APPEAL OF THE ASSESSEE ON THIS GROUND. 15. IN THE RESULT, APPEALS OF THE ASSES S EE S ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCE D IN THE OPEN COURT ON 8 TH DEC 20 17 . SD/ - SD/ - ( . ) ( . . ) ( D. MANMOHAN ) ( D.S. SUNDER SINGH ) / VICE PRESIDENT / ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 08 .12.2017 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - DEVINENI AVINASH AND DEVINENI LAKSHMI W/O & LEGAL REP. OF LATE SRI DENIVENI RAJASEKHAR, D.NO.48 - 4 - 16, GUNADALA VIJAYAWADA 2 . / THE RESPONDENT WEALTH TAX OFFICER, WARD - 2(3), VIJAYAWADA 3 . THE PR. COMMISSIONER OF INCOME TAX , VIJAYAWADA 4.THE COMMISSIONER OF INCOME TAX(APPEALS), VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM