The Welth Tax Officer, Vijayawada V. Sri Devineni Rajasekhar, Vijayawada

WTA 30/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3901 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 17-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBAKUMAR SONOWAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER W . T .A.NO S . 04 /V IZ / 201 6, 30&31/VIZ/2017 ( / ASSESSMENT YEAR S : 20 0 7 - 0 8 TO 2009 - 10 ) WEALTH TAX OFFICER WARD - 2(3) VIJAYAWADA VS. SMT.DEVINENI LAKSHMI W/O LATE DEVINENI RAJASEKHAR D.NO.48 - 4 - 16, ASHOK GARDENS GUNADALA VIJAYAWADA - 520 004 [PAN :A VYPD1431B ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI DEBA KUMAR SONOWAL, DR / RESPONDENT BY : SHRI C.SUBRAHMANYAM, AR / DATE OF HEARING : 2 6 . 03 .201 8 / DATE OF P RONOUNCEMENT : 04 . 0 4 .201 8 / O R D E R P ER BENCH : TH E S E APPEAL S ARE FILED BY THE REVENUE AGAINST THE ORDER S OF THE COMMISSIONER OF WEALTH TAX (APPEALS) [C W T(A)], VIJAYAWADA DATED 2 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA 14 . 12 .201 6 FOR THE ASSESSMENT YEAR S 20 0 7 - 0 8 TO 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 FIRST ISSUE IS RELATED TO THE EXEMPTION CLAIMED BY THE ASSESSEE U/S 2(EA) OF THE WEALTH TAX ACT RELATING TO THE PROPERTIES AT ENIKEPADU AND NIDAMANURU. THIS ISSUE IS INVOLVED FOR THE ASSESSMENT YEARS 2007 - 08, 2008 - 09 AND 2009 - 10 . DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE OWNED ONE ACRE OF LAND AT EN IKEPADU. THE ASSESSEE HAD DECL A RED THE VALUE OF PROPERTY AT RS.7,49,500/ - AND SUBMITTED THAT THE IMPUGNED LAND IS AN AGRICULTURAL LAND , HENCE EXEMPT U/S 2(EA) OF WEALTH TAX ACT, 1957. THE ASSESSING OFFICER(AO) WAS NOT CONVINCED WITH THE EXPLANATION OFFERED BY THE ASSESSEE AND OBSERVED THAT THE LAND IS AN URBAN LAND COMES WITHIN THE PURVIEW OF SECTION 2(EA) OF WEAL TH TAX ACT, 1957 BUT NOT AN EXEMPT ASSET AND ACCORDINGLY OBTAINED THE MARKET VALUE FROM SUB REGISTRAR OFFICE ( SRO ) AND BROUGHT TO TAX THE VALUE OF THE PROPERTY AT RS.15,00,000/ - PER ACRE. 2.1. SIMILARLY, T HE ASSESSEE OWNS 2.03 ACRES OF LAND AT NIDAM ANURU WHICH WAS ALSO HELD TO BE AGRICULTURAL LAND CLAIMED TO BE EXEMPT U/S 2(EA) OF 3 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA WEALTH TAX ACT. NOT BEING CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE AO HELD THE LAND I S URBAN LAND AND NOT EXEMPT U/S 2(EA) OF WEALTH TAX ACT AND ACCORDINGLY COL LECTED THE MARKET VALUE OF THE PROPERTY FROM SRO AND ASSESSED THE VALUE AT RS.1,01,50,000/ - FOR WEALTH TAX PURPOSE. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CWT(A) AND THE LD.CWT(A) EXAMINED THE RECORDS , RELEVANT DETA ILS AND HELD THAT THE IMPUGNED PROPERTY WAS AGRICULTURAL LAND AND EXEMPT FROM WEALTH TAX. FOR READY REFERENCE, WE EXTRACT THE RELEVANT PART OF THE LD.CWT(A) ORDER IN PARA NO. 6.1 AND 6.1.2 WHICH READS AS UNDER : 6.1. THE FIRST AND SECOND GROUNDS OF APPEAL PERTAIN TO BRINGING TO TAX THE VALUE OF AGRICULTURAL LANDS AT ENIKEPADU AND NIDAMANURU. THE APPELLANT CLAIMED AC.1.00 CENTS OF LAND AT ENIKEPADU AND AC 2.03 CENTS AT NIDAMANURU AS AGRICULTURAL LANDS HELD BY HIM. THE ASSESSING OFFICER TREATED THE SAME AS TAXABLE ASSETS AS THE LANDS IN QUESTION ARE IN URBAN LIMITS AND ACCORDINGLY WORKED OUT THE VALUE OF RS.15,00,000/ - FOR ENIKEPADU LAND AND RS.1,01,50,000/ - FOR NIDAMANURU LAND ACCORDING TO THE MARKET VALUE OBTAINED FROM THE RESPECTIVE SROS. 6.1.2. I PERUS ED THE RELEVANT DETAILS. THESE LANDS WERE CLASSIFIED AS DRY AGRICULTURAL LANDS AND NO NALA TAXES WERE PAID IN RESPECT OF THE SAME. EXPLANATION (1)(B) TO SECTION 2(EA) OF WEALTH TAX ACT IS AS FOLLOWS : URBAN LAND MEANS LAND SITUATE . 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 SITU ATED. EXPLANATION 1 TO SEC.2(EA) OF THE ACT, SQUARELY APPLIES TO THESE LANDS. HENCE, I DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE APPELLANT THAT THESE TWO LANDS ARE AGRICULTURAL LANDS AND NOT TO BE CONSIDERED FOR WEALTH TAX PURPOSES. THE APPELLANT GETS RELIEF ACCORDINGLY. 4 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA 4. AGGRIEVED BY THE ORDER OF THE CWT(A), THE REVENUE HAS FILED APPEAL BEFORE THIS TRIBUNAL. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE ASSESSEES CASE IS THAT BOTH THE PIECES OF LAND LOCATED AT ENIKEPADU AND NIDAMANURU ARE AGRICULTURAL LANDS AND EXEMPT U/S 2(EA) OF WEALTH TAX ACT. THE REVENUES CASE IS THAT BOTH THE LANDS ARE URBAN LANDS, HENCE NOT EXEMPT U/S 2(EA) OF WEALTH TAX ACT. THE REVENUE HAS ARGUED THAT THE A MENDMENT IS INTRODUCED W.E.F. 2013, THEREFORE THE CWT(A) HAS MISINTERPRETED THE CLAUSE (1)(B) OF EXPLANATION (1) TO SECTION 2(EA) OF WEALTH TAX ACT, HENCE ARGUED THAT THE LAND IN QUESTION IS SUBJECT TO WEALTH TAX. THERE IS NO DISPUTE WITH REGARD TO THE NA TURE OF THE LAND. THE LAND IS AGRICULTURAL LAND, THE SAME IS BEING SUPPORTED BY THE PASS BOOKS SUBMITTED BY THE ASSESSEE, WHE REIN, IT WAS CLASSIFIED AS DRY AGRICULTURAL LANDS. ON AGRICULTURAL LA ND, NO CONSTRUCTION IS PERMISSIBLE AS PER EXISTING LAWS UNLE SS THE AGRICULTURAL LAND IS CONVERTED INTO NON AGRICULTURAL LANDS. THERE WAS NO EVIDENCE BROUGHT OUT BY THE REVENUE ON RECORD TO SHOW THAT THE LANDS WERE CONVERTED AS NON AGRICULTURAL LANDS ON WHICH CONSTRUCTION OF THE BUILDING IS PERMISSIBLE. THEREFORE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE 5 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA ORDER OF THE LD.CWT(A) AND THE SAME IS UPHELD. THE REVENUES APPEAL S ON THIS GROUND FOR THE ASSESSMENT YEAR S 2007 - 08, 2008 - 09 AND 2009 - 10 ARE DISMISSED. 6. THE NEXT ISSUE INVOLVED FOR THE A.Y.200 8 - 09 AND 20 09 - 10 IS WITH REGARD TO THE TAXATION OF VACANT LAND ADMEASURING 600 SQ.YDS AT MLA QUARTERS, YOUSUFGUDA, HYDERABAD FOR WHICH THE VALUE OF THE PROPERTY WAS DECLARED AT RS.2,38,00,000/ - AND THE SAME WAS CLAIMED AS EXEMPT U/S 5(VI) OF WEALTH TAX ACT, 1957. THE AO OBSERVED THAT AS PER PROVISO TO SECTION 5(VI) OF WEALTH TAX ACT, EXEMPTION IS AVAILABLE FOR PLOT OF LAN D COMPRISING AN AREA OF 500 SQ.METE RS OR LESS, B UT THE AO OBSERVED IN THE CASE OF THE ASSESSEE THAT THE VACANT LAND IS 600 SQ.YARDS EQUIVALENT TO 502 SQ.METERS. HENCE, HELD THAT THE VALUE OF THE PROPERTY AT YOUSUFGUDA IS TAXABLE AS PER WEALTH TAX ACT AND ACCORDINGLY BROUGHT TO TAX. 7. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE WENT ON APPEAL BEFORE THE CWT(A) AND THE LD.CWT(A) ALLOWED THE APPEA L OF THE ASSESSEE HOLDING THAT IMPUGNED PLOT WAS LESS THAT 500 SQ . METERES. 6 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA 8. AGGRIEVED BY THE ORDER OF THE CWT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE REVENUES CASE IS THAT THE ASSESSEE WAS ALLOTTED 600 SQ.YARDS OF SITE WHICH WORKS OUT TO 502 SQ.METERS AND AS PER PROVISO TO SECTION 5(VI) OF WEALTH TAX ACT, ONLY 500 SQ.METERS IS ENTI TLED FOR EXEMPTION U/S 5(VI), HENCE THE ASSESSEE IS NOT ENTITLED FOR EXEMPTION AS PER PROVISO TO SECTION 5(VI) OF THE WEALTH TAX ACT. THE ASSESSEES CASE IS THAT AS PER THE SALE DEED DOCUMENT, THE IMPUGNED PROPERTY OF 600 SQ.YARDS WORKS OUT TO 500 SQ.METE RS BUT NOT 502 SQ.METERS. THE SU RVEYORS REPORT ALSO ESTABLISH THAT THE PLOT AREA WAS 594.77SQ.YARDS OR 497.36 SQ.METERS. FOR READY REFERENCE, WE EXTRACT THE RELEVANT PART OF THE ORDER OF THE LD.CWT(A) WHICH READS AS UNDER : 6.2. THE THIRD GROUND OF APPEAL RELATES TO ASSESSING THE PROPERTY (VACANT LAND) AT MLA QUARTERS, YOUSUFGUDA TO WEALTH TAX ON T HE PLEA THAT EXTENT OF VACANT LA ND IS 600 SQ. YARDS WHICH CORRESPONDS TO 502 SQ. METERS WHICH IS MORE THAN 500 SQ. METERS PRESCRIBED AS PER PROVISO TO SEC .5(VI) OF THE WEALTH TAX ACT, 1957. A) DURING APPEAL PROC EEDINGS, APPELLANT CONTENDED THAT SITE AT YOUSUF GUDA, HYDERABAD ON ACTUAL MEASUREMENT IS LESS THAN 500 SQ. M ETERS. HENCE DENIAL OF EXEMPTION AVAILABLE UNDER PROVISO TO SEC.5(VI) OF THE W T . ACT, 1957 IS NOT PROPER. IN THIS REGARD, APPELLANT SUBMITTED 7 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA SITE PLAN SHOWING THE PLOT N O . 13 IN V IJAYA CO - OPERATIVE HOUSE BUILDING SOCIETY AS PER WHICH PLOT AREA OF APPELLANT IS497.30 SQ. METERS (594.77 SQ. YARDS). B) COPY OF THE SAME WAS FORWARDED TO ASSESSING OFFICER VIDE THIS OFFICE LETTER DATED 13 . 08.2015. ASSESSING OFFICER WAS REQUESTED TO REFER THE PROPERTY TO DEPARTMENT VALUATION OFFICER TO GET THE PHYSICAL MEASUREMEN T OF LAND IN QUESTION DONE AND S UBMIT THE REPORT BY 25 . 09 .2 015. C ) ASSESSING OFFICER IN HIS LETTER DATED 22 . 02 . 2016 SUBMITTED THAT THE DVO HAD ADVISED THAT 'OFFICE OF DVO IS NOT COMPETENT TO VERIFY THE PL OT AREA WITH R EFERENCE TO NEIGHBORING BOUNDARIE S. HENCE IT WAS SUGGESTED TO GET THE PHYSICAL MEASUREMENTS AND PLOT AREA DONE BY THE GOVERNM ENT LAND SURVEYOR OF THE CONCERNED M.RO. OFFICE WHICH IS AUTHENTIC? D) AS THE V I JAYA CO - O P ERATIVE HOUSE BUILDING SOCIETY WHICH EXECUTED SALE DEED OF PLOTS IS PRESENTLY NOT IN EXISTENCE, ASSESSING OFFICER COULD NOT CAUSE NECESSARY ENQU IR YW I TH THEM REGARDIN G THE AREA OF VACANT SITE OWNED BY APPELLANT. E) PERUSAL OF DETAILS OF SCHEDULE OF PROPERTY IN COPY OF SALE DEED DOCUMENT 3712/1994 DATED 27.04.1994 INDICATES THAT PLOT NO.13 ADMEASURED 600 SQ.YARDS (500 SQ.ME T ERS) IN SURVEY N O. 125 & 126 OF YOUSUFGUDA VILLAGE IN GOLCONDA MANDAL AS THE SAME DOCUMENT CONTAINED AREA OF PLOT NO.13 IN TWO UNITS (SQ. YARDS I SQ. METERS), THE ONE WHICH IS FAVOURABLE TO APPELLANT IS TO BE CONSIDERED IN THE LIGHT OF APEX COURT DECISION IN THE CASE OF CIT VS. V EGETABLE PRODUCTS LTD. (1973)88 IT R 192 (SC). F) COPY OF ASSESSING OFFICERS LETTER WAS FORWARDED TO APPELLANT FOR HIS REPLY. APPELLANT SUBMITTED COPY OF SITE PLAN SHOWING THE PLOT NO.13 IN VIJAYA COOPERATIVE HOUSE BUILDING SOCIETY WHICH WAS PHYSICALLY M EASURED AND CERTIFIED BY KHAIRATABADMANDAL SURVEYOR. AS PER THIS, THE SURVEYOR MEASURED THE PLOT AREA AT 594.77 SQ.YARDS (OR) 497.30 8 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA SQ.METERS. COPY OF THIS IS AVAILABLE ON RECORD. G) FURTHER 1 SQ.METER = 1.19599005 SQ.YARDS. HENCE 500 SQ.METERS WORKS OUT TO 597.005025 SQ.YARDS AND NOT TO 600 SQ.YARDS. H) IN VIEW OF THE SAME, THE APPELLANTS CLAIM THAT HE IS ENTITLED TO EXEMPTION AS PER RELEVANT PROVISO TO SEC.5(VI) OF THE W.T.ACT, 1957 IS IN ORDER. I, THEREFORE, DIRECT THE ASSESSING OFFICER TO DELETE ADD ITION OF RS.2,38,00,000/ - BEING THE MARKET VALUE OF YOUSUFGUDA PROPERTY FOR WEALTH TAX PURPOSES AS THE EXTENT OF ASSET BEING A PLOT OF LAND COMPRISED AN AREA OF 500 SQ.METERS OR LESS. 9.1. DURING THE APPEAL HEARING, THE LD.DR COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD.CWT(A) STATING THAT THE IMPUGNED LAND WAS LESS THAN 500 SQ.METERS. THE SURVEYOR REPORT ESTABLISHES THAT THE IMPUGNED LAND WAS 594.77 SQ.YARDS WHICH IS EQUIVALENT TO 497 .30 SQ.METERS. IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, THE AO DID NOT MAKE ANY ADDITION WITH REGARD TO THE VALUE OF THE PROPERTY AT YOUSUFGUDA. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CWT(A) AND THE SAME IS UPHELD. THIS ISSUE IS INVOLVED FOR THE ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 AND T HE APPEAL S OF THE REVENUE ARE DISMISSED FOR BOTH THE ASSESSMENT YEARS. 1 0 . IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. 9 W TA NO S. 04 /VIZ/201 6, 30,31/VIZ/2017 SMT. DEVINENI LAKSHMI, W/O SRI DEVINENI RAJASEKHAR VIJAYAWADA THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4 TH APR 20 1 8 . SD/ - SD/ - ( . . ) ( . ) ( D.S. SUNDER SINGH ) (V. DURGA RAO) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /VISAKHAPATNAM /DATED : 04 .0 4 .201 8 L. RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - 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 WEALTH TAX(APPEALS), VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM