Income Tax Appellate Tribunal - Bangalore
Sri A.R.Narendranath (Huf) , Bangalore vs The Assistant Commissioner Of Wealth ... on 15 December, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH : BANGALORE
BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER
AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
WTA Nos.7 to 11/Bang/2017
Assessment years : 2009-10 to 2013-14
Shri A.R. Narendranath (HUF), Vs. The Assistant Commissioner of
143, ARS Plaza, Wealth Tax,
8th Cross, Malleswaram, Circle 2(2)(1),
Bangalore - 560 003. Bangalore.
PAN: AADHN 0671F
APPELLANT RESPONDENT
Appellant by : Smt. Sheetal Borkar, Advocate
Respondent by : Ms. Neera Malhotra, CIT(DR)(ITAT)-2, Bengaluru
Date of hearing : 15.11.2017
Date of Pronouncement : 15.12.2017
ORDER
Per Bench These appeals are preferred by the assessee against the order of the CIT(Appeals) inter alia on the common grounds. Therefore, all these appeals are disposed of through this consolidated order. For the sake of reference, the grounds of appeal raised in WTA No.7/Bang/2017 are extracted hereunder:-
"1. On the facts and circumstances of the case, the learned CWT (A) without appreciating the submissions of the Appellant erred in passing the order in the manner in which she did.
2. The learned CWT(A) erred in not appreciating that the conditions required to invoke jurisdiction u/s 17 of the Act being WTA Nos.7 to 11/Bang/2017 Page 2 of 12 absent, the assessment ought to be held non-est and bad in law. There being no omission much less an omission of declaration of wealth in the relevant assessment year in the return of net wealth filed by the Appellant, the re-opening of the assessment u/s.17 was without jurisdiction and consequently the reassessment was liable to be annulled.
3. The learned CWT(A) failed to appreciate that the order passed under Section 16(3) read with Section 17 of the Act was opposed to law and liable to be cancelled in that the assessing officer proceeded to pass the order along with the adjudication of the objections raised by the Appellant.
4. The learned CWT(A) ought to have appreciated that the assessment proceedings should have been commenced only after adjudication of the objections and having failed to do so, the assessment order passed was opposed to law and accordingly liable to be cancelled.
5. On the facts and in the circumstances, the order passed by CWT(A) is opposed to law and accordingly the impugned net wealth determinable is liable to be set aside.
6. The learned CWT(A) ought to have appreciated that the land remained to be agricultural land as on the valuation date and the conversion of land to non agricultural nature took place during the AY 2013-14 even though the order for conversion was sought in the year 2008 and accordingly the same was not liable to be included as 'asset' u/s 2(ea) for the purpose of Wealth-tax Act.
7. The learned CWT(A) ought to have appreciated that the land remained to be agricultural land in the Government records till 2013 and used for agricultural production, therefore the land does not fall within the definition of 'Urban' under the Act and accordingly excludible while computing the net wealth of the appellant.
8. The learned CWT(A) ought to have appreciated that even though the permission for conversion was obtained in 2008, the land continued to be agricultural land and even the Government having recognized, was levying land revenue accordingly and the fact that the joint development agreement was executed in 2013 WTA Nos.7 to 11/Bang/2017 Page 3 of 12 would not alter the situation for the purpose of wealth-tax since the nature of land as on the date of valuation was significant for the purpose of considering the land as agricultural land for the purpose of the Act.
9. The learned CWT(A) further erred in not relying the case law cited by the appellant.
10. The learned CWT(A), without prejudice, ought to have accepted the explanation of the appellant and reduce the value of the land as determined by the DVO.
11. The learned CWT(A) ought to have appreciated that the DVO failed to consider the objections of the appellant while determining the value of the land and accordingly the value as determined by the DVO was unsustainable and accordingly was not includible while computing the net wealth of the appellant.
12. Without prejudice, the value determined is excessive, arbitrary and unreasonable and liable to be reduced substantially.
13. The learned CWT(A) erred in confirming the levy of interest u/s.17B of the Act.
14. For these and such other grounds that may be urged at the time of hearing of the appeal, the Appellant prays that the appeal may be allowed."
2. During the course of hearing, the ld. Counsel for the assessee has invited our attention that the issue involved in these appeals is with regard to the nature of land for the purpose of Wealth-tax Act. During the course of hearing, our attention was invited that the impugned land is jointly owned by the assessee as well as A.N. Manidatta (HUF). In the case of A.N. Manidatta (HUF), the Tribunal has adjudicated an identical issue and has held that after conversion of use of this land, the land has become non- agricultural land and is an asset for the purpose of Wealth-tax Act. The ld. Counsel for the assessee further contended that in the case of A.N. Manidatta (HUF), the Tribunal has not examined the revenue records and the contention of the assessee that despite the conversion of land for WTA Nos.7 to 11/Bang/2017 Page 4 of 12 non-agricultural purposes, the land continued to be used as agricultural land. Therefore, this case should be decided independently without being influenced by the order of the Tribunal in the case of A.N. Manidatta (HUF) in WTA Nos.1 to 5/Bang/2016 dated 15.03.2017.
3. The ld. DR, on the other hand, has contended that the Tribunal has taken a view after taking all relevant evidence placed before it and once it is held that portion of the said land is converted for non-agricultural purposes in the other case, no different view can be taken.
4. Having carefully examined the orders of the authorities below in the light of rival submissions and the order of the Tribunal in the case of A.N. Manidatta (HUF) (supra), we find that an identical issue was examined by the Tribunal in the case of A.N. Manidatta (HUF) (supra) in which the Tribunal has held that this agricultural land on its conversion for non- agricultural purposes ceased to be an agricultural land. Therefore, it becomes an asset for the purposes of Wealth-tax Act. The relevant observations of the order of the Tribunal are extracted hereunder for the sake of reference:-
"08. Now, the AR of the assessee pleaded the same points canvassed before the CWT (A) and on the lines of the ground nos
5 to 13, supra. We heard the rival submissions and gone through relevant material. Let us examine the provisions as under:
(ea) "assets", in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means--
(i) .............................................;
(2)............................................;
(3) ......................................;
(4).............................. ;
WTA Nos.7 to 11/Bang/2017 Page 5 of 12 (5) ..............................................;
(iv).......................................;
(v) urban land;
(vi) ....................................
Explanation 1-,--
(a) .........................
(i) ..............................;
(ii) .............................. ;
(b) "urban land" means land situate_
(i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the valuation date; or
(ii) in any area within such distance, not being more than eight kilometres from the local limits of any municipality or cantonment board referred to in subclause (i), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette, 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 situated or the land occupied by any building which has been constructed with the approval of the appropriate authority or any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition 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;"
WTA Nos.7 to 11/Bang/2017 Page 6 of 12
09. There is no distinction in respect of agricultural land in the above provision. In the definition of "urban land" given in cl. (b) to Expln. 1 to S. 2(ea), there is no exclusion provided for agricultural land. Therefore, agricultural land which is urban land is includible in the definition of "asset' in s. 2(ea). Subsequently, the definition of urban land in the Wealth Tax Act, 1957 has been amended by Finance Act 2013 w.e.f. assessment year, 1993-94 to specifically provide that wealth tax is not leviable on urban land which is,
(i) classified as agricultural land in the records of the Government; and
(ii) used for agricultural purposes.
Thus, both conditions that is the land in question should be agricultural land and it should also be used for agricultural purposes have to proved to satisfy the claim of exemption under the Wealth Tax Act.
10. Now let us examine the evidences. Shri A R Narendranath is father of Shri Manidatta, kartha, and they jointly own the land. It is seen from the translated copies in the paper book that Sri A R Narendranath sought conversion of land by applications dt 25.9.2006 and one of the orders of the Deputy Commissioner , Bangalore is extracted as under :
"OFFICIAL MEMORANDUM Sub : Application dated 25/9/2006 submitted by Sri A. R. Narendranath , A.R.S. Farm , S, M, Road, T. Dasarahalli, -
- Bangalore - 51, requesting for conversion of land measuring 1-38 Acre/Gunta in Sy.No. 14/1 of Peenya Village, Yeshwanthpur Hobli, Bangalore North Taluk , Bangalore District, for Non-Agricultural Industrial Purpose.
Ref: 1) Government letter No. RD.7:LGP/95 dated 7/6/1999
2) Government Circular No.RD.56:LGP/2008 dated 10/9/2008 and 24/9/2008.
WTA Nos.7 to 11/Bang/2017 Page 7 of 12
3) Letter No,ALN. :S.R.(N)44/06-07 dated 26/10/2006, of the Tahsildar, Bangalore North Taluk.
4) Land conversion fee of Rs,3,39,768/- and Phodi fee of Rs.55/- totally Rs. 3,39,823/- paid to S.B.M. vide DD/Challan No.52 dated 26/11/2006.
******** OFFICIAL MEMORANDUM Since the Applicant Sri A.R. Narendranath, has paid the amount as stated under Reference (4) above at the rate of Rs. 1,74,240/- (Rupees Onakh Seventy Four Thousand Two Hundred and Forty only) in accordance with Conditions under Section 95(2), 95(4) and 95(7) of the Karnataka Land Revenue Act 1964 and the following Conditions, Rule 107(1) of the Karnataka Land Revenue (Amendment) Rules 1994, the Application of the said Applicant Sri A.R. Narendranath has been considered and this order of conversion is issued for utilization of land measuring 1 - 38 Acre / Gunta in Sy. No. 14/1 of Peenya Village, Yeshwanthpur Hobli, Bangalore North Taluk, Bangalore District, for Non-Agricultural Industrial Purpose, subject to the following conditions:
CONDITIONS:
(1) Unless approval is obtained from the Statutory Authority i.e. Bangalore Development Authority/BMRDA (Local Planning Authority), Authority/ B.M.R.D.A. (Local Planning Authority), B. M .I. C .A. P. A. /Pollution Control Board, for using the land for the purposes for which conversion is granted, no right as per this Order is conveyed to the occupant of the land.
(2) The Converted land must be used for the Industrial purpose only. The land shall not be used for any other purpose without obtaining prior permission.
(3) The proposed Layout Plan of this land and licence etc. must be got approved by the Bangalore Development Authority! B. M .R. D A. (Local Planning Authority), B. M.I.C.AP.A. /Pollution Control Board and thereafter building may be constructed in conformity with the approved plan. Without obtaining approval for Layout Plan in this land, no alienation shall be made.
WTA Nos.7 to 11/Bang/2017 Page 8 of 12 (4) The other necessary Road area, Road margin, vacant space, etc. shall be reserved for the required purpose after fixing the required extent in accordance with law and also as stipulated in the Layout plan approved by the Bangalore Development Authority/ B.M,R.D.A. (Local Planning Authority)/ B.M.I.C.A.P.A. / Pollution Control (5) Without obtaining sanctioned Plan from the Authority concerned, Site/Building shall not be got registered. If the entire extent of converted is proposed to be sold, then this order will not come in its way.
(6) In the interest of the public, it is the responsibility of the Applicant to provide Civic Amenities such as Electricity, Water supply , Drainage System etc . in the land in question to the site owners in accordance with law to keep good Health, clean environment, public facilities and security.
(7) In case of any phoot kharab land adjacent to this land, the same may be reserved for government purpose in accordance with Section 67 of the Karna taka Land Revenue Act 1964.
(8) As per Government Order No, PWD.7556-665.R and B6- 54-5 and letter No. P.17(11)/67 dated 1/1/1996 of the Transport Department of the Central Government and the directions given by the government from time to time, for the building proposed to be constructed in this land, a margin land of 40 meters from the middle of the Road in respect of National and State Highways and margin land of 25 meters from the middle of the road in respect of District highways shall be reserved and no building shall be constructed in this vacant land.
(9) The converted land should be used for the purpose for which conversion order is granted within 2 years from this date.
(10) To implement effective measures to successfully prevent the fumes, gas etc. coming out of the Industrial units that may be established in the converted land, so that no harm shall be caused to the public health and environmental pollution is prevented. The Industrial Units established in the lands converted for Industrial purpose, shall have obtained permission from the Karnataka Pollution Control Board and Department of Environment.
WTA Nos.7 to 11/Bang/2017 Page 9 of 12 (11) This order is subject to the Judgement of that may be passed in any pending Suit/Writ Petition/Appeal before any Court relating to this land, (12) If the land in question is included under any land acquisition proceedings this Authority is not responsible for the same.
(13) In case of violation of the any of the conditions, this land conversion order will be cancelled without giving any notice and action will be taken to levy penalty as per Section 96 of the Karnataka Land Revenue Act 1964 . Further if there are any unauthorized constructions are put up in this land, action will be taken to demolish the same without giving any compensation and the expenses incurred in this regard will be recovered from the Khatedars as a balance of land Revenue.
SCHEDULE DETAILS All that piece and parcel of the land measuring 1 - 38 Acre/Gunta in Sy.No. 14/1 of Peenya Village, Yeshwanthpur Hobli, Bangalore North Taluk, Bangalore District bounded on the:
East by : S.M.Road;
West by : Land in Sy.No. 11/3 of T.Dasarahalli;
North by : Private land;
South by : Private land.
Sd/-
(H. Ramanjaneya) Special Deputy Commissioner, Bangalore District, Bangalore.
Copy sent to the following for taking suitable further action:
(1) Tahsildar, Bangalore North Taluk, Bangalore along with original file and Challan, with a request to make entries in the concerned RTC regarding conversion of land in respect of the elated survey number and reduce the land tax in the Khatedar account in respect of this land, WTA Nos.7 to 11/Bang/2017 Page 10 of 12 (2) Commissioner, BDA, Bangalore/ B.M.R.D.A. (Local Planning Authority), B.M.I.C.A.P.A., for taking further suitable action, (3) Assistant Commissioner, Bangalore North Sub Division, Bangalore.
(4) Deputy Director, Survey and Land Records, Bangalore Sub Division, Bangalore, along with R.T.C. and Sketch, with a request to complete the Land Conversion Phode work immediately.
(5) The Sub Registrar, Yeshwanthpur Hobli, Bangalore North Taluk, Bangalore for information, (6) Sri A.R,Narendranath, Applicant, ARS Farm S.M.Road, T.Dasarahalli, Bangalore - 560057, under certificate of posting.
(7) Extra Copy.
Sd/-
(H. Ramanjaneya) Special Deputy Commissioner, Bangalore District, Bangalore."
11. From the evidences , it is clear that Sri A R Narendranath made two applications dt 25.9.2006 for the conversion of non- agricultural & Residential and Non-agricultural and industrial purposes and followed it by paying huge sums viz Rs.4,75,952/- & Rs.3,39,823/-, on 26.11/28.12.2006, respectively, for the conversion and the conversion is granted on 06.10.2006 & 24.11.2008 , respectively by an officer at the level of Special Deputy Commissioner. The order also elaborately mentions the conditions and the directions to the concerned authorities for doing all that is required in connection with the conversion. One of the conditions is that the land can not be used for any other purpose than the purpose for which the conversion was granted. Thus, it is clear from the totality of the facts and circumstances mentioned above that the assessee had no intention to use the impugned land as an agricultural land. On the other hand, wanted it to be non agricultural land , pursued it and converted it as non agricultural land . The Government on due consideration allowed the conversion and classified the impugned land as non WTA Nos.7 to 11/Bang/2017 Page 11 of 12 agricultural land or classified it as the land for Residential and Industrial use as sought by the assessee. Thus, the impugned land is not an agricultural land after 26.11/28.12.2006, respectively, and hence the assessee's other plea that it was put to agricultural use is not relevant. The impugned land is an asset under Wealth Tax. We have considered the assessee's plea on the valuation and gone through the assessment order. The AO has considered the valuation report furnished by the DVO who himself has valued the asset after considering the assessee's objections, sent the assessee's objections to the VO , considered the VO's reply and then passed his orders . We do not find merit in the assessee's plea . The corresponding appeal grounds fail.
12. In the result, the assessee's appeals for the a y s. 2009-10 to 2013-14 are dismissed."
5. The CIT(Appeals) adjudicated the issue in the light of the order of the Tribunal in the case of A.N. Manidatta (HUF) (supra) who is the co- owner of the land. Since the Tribunal has taken a particular view in similar set of facts and the same view is followed by the CIT(Appeals) while dismissing the appeals of the assessee, therefore we do not find any error in the order of the CIT(Appeals), accordingly, we confirm the same.
6. In the result, the appeals of the assessee stand dismissed.
Pronounced in the open court on this 15th day of December, 2017.
Sd/- Sd/-
( INTURI RAMA RAO ) ( SUNIL KUMAR YADAV)
Accountant Member Judicial Member
Bangalore,
Dated, the 15th December, 2017.
/ Desai Smurthy /
WTA Nos.7 to 11/Bang/2017
Page 12 of 12
Copy to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR, ITAT, Bangalore.
6. Guard file
By order
Senior Private Secretary
ITAT, Bangalore.