No wealth tax on land
which remains vacant as per construction Plan
Case
Law Citation-
CIT Vs
M/s MIL Industries Ltd (Madras High Court), Tax Case (Appeal) No.168 to 170 of
2015, Date of decision: 08-06-2015
Brief
of the case:
Madras
High Court held in CIT Vs M/s MIL Industries Ltd that the vacant land left on
constructed property as per the construction plan of that property would not be
treated as a vacant urban land because the vacant land left was the requirement
of the construction plan, failing which was not possible to construct the
property.
Facts
of the case:
Assessee
was having a land on which he had constructed a factory and some part of the
land left vacant which was included by the AO in the net wealth of the assessee
but the assessee argued that there used to be the condition of the municipal
corporation that some part of the land had to be left vacant so the same had to
be included in the proviso to sec 2(ea), in other words the vacant land had to
be excluded from the definition of the asset. But revenue on the other hand
argued that as the land was left vacant so the same had to be included in the
net wealth of the assessee.
Contention
of the assessee:
Assessee
was of the view that on the land, factory was constructed according to the plan
approved by the municipal authorities and as per the approved plan some vacant
land had to be left while construction of a building which the assessee had
kept .So the AO was wrong in considering the vacant land in the net wealth of
the assessee because it was not a vacant land it was the factory building.
Contention
of the revenue:
Revenue
was of the view that vacant land had to be included in the definition of the
asset as per the wealth tax act , So as the factory had not been constructed on
the whole of the land so the same had to be included in the definition of the
asset as per the wealth tax act.
Held by
Hon’ble high Court:
High
Court held that as the factory had been constructed on the land as per the
approved plan of the local authorities and as per the approved plan some part
of land had to be kept vacant, so the vacant land had to be considered as land
& Building because on the land, building had been constructed which is not
an asset as per the wealth tax act, So ITAT was right in upholding the appeal
of CIT(A).
Direct
link to download the full text of the above judgment:
http://judis.nic.in/Judis_Chennai/list_new2_Pdf.asp?FileName=227453
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