Income Tax Appellate Tribunal - Chennai
Dhandayuthapani Foundry Pvt Ltd., ... vs Department Of Income Tax on 19 March, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
BENCH 'A', CHENNAI
Before Shri U.B.S. Bedi, J.M. & Shri Abraham P. George, A.M.
W.TA. No.12/Mds/2010
Assessment year: 2002-03
The Assistant Commissioner of Wealth- Vs M/s. Dhandayuthapani Foundry
tax, Company Circle I(2), 63, Race . Pvt. Ltd., 131/4B, Vilankurichi
Course Road, Coimbatore 641 018. Road, Coimbatore 641 035.
[PAN: AAACD6151G]
(Appellant) (Respondent)
Revenue by : Shri Shaji P. Jacob
Assessee by : Shri G. Baskar
O R DE R
PER U.B.S. Bedi, J.M.
This appeal of the Revenue is directed against the order passed by the ld. CWT(A) I, Coimbatore dated 19.03.2010 relevant to the assessment year 2002-03, whereby action of the ld. CWT(A) in holding that the assessee was not in possession of land sold on 12.07.2001 on the date of valuation i.e. 31.03.2002 and hence not liable to pay wealth tax has been challenged.
2. Facts indicate that the assessee company sold its land measuring 31,829 sq.ft. at T.S. No. 1075/IB 2 part of Krishnarayapuram Revenue Village, Puliakulam Road, Coimbatore 641 037 vide sale deed dated 02.07.2001. The Assessing Officer issued notice under section 17 dated 05.03.2009 since the assessee had not filed wealth tax return for assessment year 2002-03. The assessee filed the wealth tax return admitting wealth at `.12,45,400/- on 2 WTA WTA No. 12/Mds/10 07.10.2009. Holding that the evidence produced by the assessee did nto conclusively prove that the assessee is liable to wealth tax on the above mentioned lands, the Assessing Officer added the same at `.61,50,000/- to the taxable wealth of the assessee and completed the assessment.
3. Aggrieved, the assessee preferred appeal before the first appellate authority and contended that there was no vacant land exigible to tax as concluded by the Assessing Officer. It was also submitted that the market value adopted by the Assessing Officer was high and the interest levied under section 17B was not in accordance with the law. The ld. AR is stated to have produced copies of the sale deed dated 12.07.2001 to show that the said land has been sold.
4. The ld. CWT(A), while considering and accepting the plea of the assessee has after reproducing 2nd portion of the Act with regard to charge of wealth-tax, valuation date, definition and meaning of net wealth as per Wealth Tax Act has concluded to delete the impugned addition as per para 6 of his order, which is reproduced as under:
"6. From a combined reading of the above two sections, it is clear that the assessment of net wealth is of all assets belonging to the assessee as on the date of valuation. Here, it means the aggregate value of assets belonging to the appellant as on 31.03.2002. The appellant had already sold the said land on 12.07.2001 and the said property did not belong to the appellant on 31.03.2001. The provisions of the Act in this respect are plain and simple. Thus, the addition made by the Assessing Officer cannot be sustained in law and is deleted."
3 WTA WTA No. 12/Mds/10
5. Challenging the order of the ld. CWT(A), the Department has pleaded that the ld. CWT(A) has erred in holding that the assessee was not in possession of the land sold on 12.07.2001 on the date of valuation i.e. 31.03.2002 and hence not liable to wealth tax. Further, the ld. CWT(A) ought to have observed that only a portion of the land was sold and the assessee was liable to pay wealth tax on the remaining portion in his possession and by filing a copy of sale deed dated 12.07.2001, it was pleaded for setting aside the order of the ld. CWT(A) and restoring that of the Assessing Officer.
5. Whereas, the ld. Counsel for the assessee submitted that no doubt certain portion of land was not in possession of the assessee on the date of valuation, but the Assessing Officer's finding that the evidence produced by the assessee did not conclusively prove that the assessee is not liable to wealth tax on the said land and adding a sum of `.61,50,000/- to the taxable wealth of the assessee was not at all correct.
6. We have heard both the sides, considered the material on record and find that while making the assessment, the Assessing Officer has given a reference of sale deed dated 12.05.2001 to add `.61,50,000/- in relation to the net wealth of the assessee for the year under consideration, whereas, the ld. CWT(A) while deleting the addition made by the Assessing Officer has given a reference of sale deed dated 12.07.2001. So, there appears to be confusion with regard to making of the addition and deleting the addition in first appeal stage, because both the authorities are quoting different sale deeds. Therefore, 4 WTA WTA No. 12/Mds/10 in the interest of the justice and to have fair play in the matter, we are of the considered opinion that the orders of the authorities below with regard to addition of `.61,50,000/- made by the Assessing Officer and deleting such addition by the ld. CWT(A) requires re-look. Therefore, we set aside the orders of authorities below and restore the matter back on the file of the Assessing Officer for re-deciding the case of the assessee after giving due opportunity to the assessee. We hold and direct accordingly.
7. In the result, the appeal of the Department is allowed for statistical purpose.
Order pronounced soon after the conclusion of hearing on 12.01.2011.
Sd/- Sd/- (ABRAHAM P. GEORGE) (U.B.S. BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, the 12.01.2011 Vm/- Copy to : Appellant/Respondent/CIT(A)- /CIT, /DR