Giridhari Govindas (HUF) v. ACIT ( 2021 ) 209 TTJ 953 ( Chennai ) ( Trib)

Wealth -tax Act , 1957 .

S. 2(ea) : Asset- Lack of evidence to support the land being vacant as of the cut-off date and evidence to the contrary, issue set aside to the file of AO for verification, whether the particular asset can be brought to tax under the Wealth Tax Act [ S. 16(3)]

The Assessee held immovable asset, the value of which during the relevant AY 2008-09 was more than Rs. 15 lakhs. The Assessee had not filed return of wealth for the AY 2008-09. Therefore, the assessment has been reopened under s. 16(3) of the WT Act, 1957 (hereinafter ‘the Act’).

The AO noticed that the Assessee is the owner of an asset on which a residential house originally existed. In the relevant AY, the Assessee entered into a joint development agreement (hereinafter JDA) and as a consequence, the building was demolished, and the asset became a vacant land as on 31st March 2008 and 31st March 2009.

The Assessee contended that there was a building on the land as on the valuation date i.e., on 31st March 2008 and 31st March 2009 and only after the JDA, the building was demolished between April 2009 to March 2010. Therefore, there was a building on the land as on 31st March 2008 and 31st March 2009 and hence, land cannot be included in the definition of asset as defined under s. 2(ea) of the Act. Upon further appeal to the CWT(A), the CWT(A)upheld the findings of the AO.

The Hon’ble Tribunal after much scrutiny observed that, for the impugned AY 2007-08 and 2008-09, the land was not a vacant urban land and the existing building was demolished, is not supported by any evidence. It restored the matter to the AO for his verification on whether building is used for own residential purpose or business purpose or the same has been let out during the relevant previous year. Further also held that simply on the ground that there was a building in the impugned land, the same cannot be excluded from the ambit of wealth-tax, & that the AO needs to verify above facts before concluding whether a particular asset comes under the definition of asset as defined under S. 2(ea) of the Act or not. (AY. 08-09; 09-10) 


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