Income Tax Appellate Tribunal - Hyderabad
Amara Raja Batteries Limited, , ... vs Acwt Central Circle-1(1), Tirupati on 16 September, 2022
WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati
आयकर अपील य अ धकरण, है दराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ' B ' Bench, Hyderabad
Before Shri R.K. Panda, Accountant Member
AND
Shri K. Narasimha Chary, Judicial Member
WTA No.9/Hyd/2022
Assessment Year: 2011-12
Amara Raja Batteries Ltd, Vs. Asstt. Commissioner of
Tirupati Wealth Tax, Central
PAN:AABCA9264E Circle-1(1) Tirupati
(Appellant) (Respondent)
Assessee by: Shri E. Phalguna Kumar, CA
Revenue by: Smt. M. Narmada, DR
Date of hearing: 14/09/2022
Date of pronouncement: 16/09/2022
ORDER
Per R.K. Panda, A.M
This appeal filed by the assessee is directed against the order dated 23.2.2022 of the learned CWT (A)-11, Hyderabad relating to A.Y.2011-12.
2. The grounds raised by the assessee are as under:
"1. The Order of the Ld. Commissioner of Wealth Tax (Appeals) - 11, Hyderabad, is erroneous and is not based on facts and circumstances of the case. Hence the same is bad in law and the decision of Ld. Commissioner of Wealth Tax (Appeals) - 11, Hyderabad needs to be reversed.
2. The Ld. Commissioner of Wealth Tax (Appeals) -11, Hyderabad has erred in upholding the addition of Rs 7,20,73,072/- made by the Ld. AO by treating the staff quarters as taxable wealth under Sec 2(ea) of the Wealth Tax Act 1957. The Ld. Commissioner of Wealth Tax (Appeals)-11, erred in ignoring the plea of the appellant that the staff quarters was Page 1 of 7 WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati exempted specifically from the definition of taxable wealth under Sec 2(ea) of the Wealth Tax Act 1957.
3. The Ld. Commissioner of Wealth Tax (Appeals) - 1 1, Hyderabad has erred in upholding the addition of Rs 1,56,31,975/- made by the Ld. AO by treating the factory land as taxable wealth under Sec 2(ea) of the Wealth Tax Act 1957. The Ld. Commissioner of Wealth Tax (Appeals)- 1 1, erred in ignoring the plea of the appellant that the entire land is used for the purpose of business of the appellant and hence the same is not chargeable to wealth tax under Sec 2(ea) of the Wealth Tax Act 1957.
4. The appellant craves leave to add, amend, alter, modify, substitute, abridge and/or rescind any or all of the above grounds with the kind permission of the Hon'ble Tribunal at any time either before or on the date of hearing."
2.1 Facts of the case, in brief, are that the assessee is a listed public limited company engaged in the business of manufacturing and sale of automotive and industrial lead acid batteries. The manufacturing activity and the registered office of the assessee is located at Karakambadi, Tirupati. The assessee filed its return of wealth manually on 30.09.2011 declaring a net wealth of Rs.2,23,28,013/-. The net wealth of the assessee consisted of motor cars only. It had other assets as per the fixed asset schedule. But according to the assessee, none of the same are liable for wealth tax. The Assessing Officer issued a notice u/s 7 of the WTA on 26.3.2018 asking the assessee to furnish return of wealth in the prescribed form. The assessee in response to the same filed a letter on 13.9.2011 stating that the return of net wealth filed on 30.09.2011 may be treated as net wealth in response to notice u/s 7 of the WTA.
2.2 During the course of assessment proceedings, the Assessing Officer noted that the assessee has disclosed only value of vehicles as on valuation date i.e., 31.3.2011 to the tune of Rs.2,62,39,301/-. In absence of any explanation filed by the assessee regarding the difference in the value of the vehicles and Page 2 of 7 WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati whether the same is exempt from WTA, the Assessing Officer made addition of Rs.39,11,288/-.
3. The Assessing Officer further noted from the fixed assets schedule that the assessee has disclosed the closing WDV of the buildings (staff quarters) at Rs.7,20,73,072/- and closing WDV of the land at Rs.16,82,84,225/-. The explanation of the assessee that the explanation (1) to sub-section (i) to section 2(ea) of the I.T. Act, 1961 is applicable for the land and building was rejected by the Assessing Officer in absence of furnishing of details of employees who are allotted quarters, whether employees are part-time or full time and their salary particulars. In absence of these details that the buildings are used for staff quarter, the Assessing Officer held that the same has to be treated as an asset for the purpose of calculation of the net wealth. He further noted that the assessee company also collects a sum of money as rental charges which qualifies as perquisite in the hands of the employees. The explanation of the assessee that the sums so collected do not constitute the income of the assessee and that the same is deposited with the housing society of the company was not accepted by the Assessing Officer to keep the asset (staff quarters) outside the provisions of the Wealth Tax Act. Accordingly, he made an addition of Rs.7,20,73,072/-.
4. The Assessing Officer similarly noted that the value of the land as per fixed asset schedule annexed to the Balance Sheet as on 31.3.2011 is Rs.16,82,84,225/-. On being questioned by the Assessing Officer, the assessee submitted that it has no vacant land and all the land held by the assessee is being used for its business on which buildings are constructed and hence not exigible to the Wealth Tax. However, the Assessing Officer noted Page 3 of 7 WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati that the buildings are not constructed on the entire land and the assessee has not even furnished the details such as extent of land used for building and the vacant land. According to him, it is not a case where every inch of the land is used for construction of factory building. In absence of any details/bifurcation of land as vacant land/buildings, the land as mentioned in the depreciation schedule annexed to the balance sheet was brought to wealth tax. He noted that as per the fixed asset schedule, an amount of Rs.15,58,78,645/- was shown as addition during the year ending on 31.3.2011. He, therefore, did not treat the same as wealth since the asset is not used by the assessee for more than 2 years from the date of its acquisition as on 31.3.2011. He, therefore, increased the opening WDV by 25% and arrived at Rs.1,56,31,975/- and brought the same to Wealth Tax. Accordingly, the Assessing Officer made addition of Rs.11,39,44,348/- to the declared net wealth of Rs.2,23,28,013/-. After allowing exemption of Rs.30.00 lakhs, he determined the net wealth at Rs.11,09,44,348/-.
5. In appeal, the learned CWT (A) deleted the addition of Rs.39,11,288/-. He however, sustained addition of Rs.7,20,73,072/- on account of buildings (staff quarters) and addition of Rs.1,56,31,975/- being addition on account of vacant land.
6. Aggrieved with such order of the learned CWT(A), the assessee is in appeal before the Tribunal.
7. The learned Counsel for the assessee at the time of hearing filed the following additional evidences:
i) Depreciation schedule Page 4 of 7 WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati
ii)List of employees occupying the quarters
iii)Summary of area occupied by factories and area left for greenery
iv)Detailed list of area occupied by each of the factories and area left for greenery besides such factories.
v) Details of land allotted to appellant by State Govt.
vi) Copy of the national Environment Policy 2006
vii)Copy of the Expert Committee Report.
8. The learned Counsel for the assessee further submitted that these additional evidences go to the root of the matter for deciding the appeal. He submitted that these evidences could not be filed before the Assessing Officer due to shortage of time given for compilation of the data from various sources. Further, due to termination of the services of the employees, who were dealing with the tax authorities, additional evidences could not be submitted before the learned CWT (A) also. He accordingly submitted that these additional evidences should be admitted and the matter may be restored to the file of the Assessing Officer for deciding the issue afresh.
9. The learned DR, on the other hand, strongly opposed the admission of the additional evidence and heavily relied on the order of the learned CWT (A).
10. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CWT (A) and the paper book filed on behalf of the assessee. We find the Assessing Officer in the instant case made addition of Rs.7,20,73,072/- being the value of the buildings (staff quarters) and an amount of Rs.1,56,31,975/- being the market value of the Page 5 of 7 WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati WDV at the beginning of the year of the vacant land. It is the submission of the learned Counsel for the assessee that the assessee is covered by the exception stated in Explanation1 of the clause (i) of section 2(ea) of the Wealth Tax Act, 1957.
11. Further, it is his submission that there is no vacant land belonging to the assessee and the entire land is being used for industrial purposes. It is also his submission that if the additional evidences now filed are admitted, the same will substantiate that the assessee is not liable for any wealth tax. Since the additional evidences filed before us were neither produced before the Assessing Officer or the CWT (A) and since these additional evidences go to the root of the matter for deciding the appeal, therefore, considering the totality of the facts of the case and in the interest of justice, we admit the additional evidences and restore the issue to the file of the Assessing Officer with a direction to consider these additional evidences and decide the issue as per fact and law. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
12. In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 16th September,2022.
Sd/- Sd/-
(K. NARASIMHA CHARY) (R.K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, dated 16th September, 2022.
Vinodan/sps
Page 6 of 7
WTA No.9 of 2022 Amara Raja Batteries Ltd Tirupati Copy to:
S.No Addresses 1 Shri Y. Delli Babu, Chief Financial Officer, Amara Raja Batteries Ltd Terminal Assessee 1-18/AMR/NR, Nanakramguda, Gachibowli, Hyderabad 500032 2 Asstt. Commissioner of Wealth Tax, Circle-1, Aayakar Bhavan, 2nd Floor, KT Road, Tirupati 517501 3 CWT (A)-11, Tirupati 4 Pr. CWT-, Tirupati 5 DR, ITAT Hyderabad Benches 6 Guard File By Order Page 7 of 7