Ramachandran Nair, J.

This Wealth Tax Appeal is filed by the assessee challenging the order of the Tribunal upholding wealth tax assessment on the value of the land on which a commercial building was under construction as on the valuation date. The appellant-assessee is a public limited company engaged in production and sale of automotive tyres. It was allotted a plot in Gurgaon earmarked for institutions by the Haryana Urban Development Authority on 29.12.1995. The appellant commenced construction of a commercial building in the plot in November, 1997, completed construction of a four storied building with basement and started occupying it from 29.3.2000. After completion of construction of the building, the land and building are granted exemption from wealth tax as the said asset falls under the exempted category.

However, in the course of assessment for the assessment year 1998-99, the Wealth Tax Officer assessed the value of the land treating it as urban land under clause (v) of Section 2(ea) under which "assets" are defined. Even though the assessee contended that construction of building was in progress on the valuation date, that is, 31.3.1998, and so much so the land cannot be treated as urban land under Explanation (b) to clause (vi) of Section 2(ea) of the Act and the first appellate authority upheld the claim of exemption to the assessee, the Tribunal on second appeal by the department, reversed the order of the first appellate authority and upheld the assessment by relying on the decision of the Karnataka High Court in COMMISSIONER OF WEALTH TAX V. GIRIDHAR G. YADALAM, (2007) 211 CRT (Kar.) 43. We have heard senior counsel Sri. G. Sarangan along with Sri. Vinod Chandran appearing for the appellant and senior counsel Sri. P.K.R Menon along with Sri. Jose Joseph, appearing for the respondent.

2. Since the question involved is on the interpretation of meaning of the term "urban land" as defined under the Act, we have necessarily to refer to the definition clause and for easy reference the relevant portions of the definition clause is extracted hereunder:

2.(ea) "assets", in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means—

(i) any building or land appurtenant thereto (hereinafter referred to as "house"), whether used for residential or commercial purposes or for the purpose of maintaining a guest house or otherwise including a farm house situated within twenty-five kilometers from the local limits of any municipality (whether known as municipality, municipal corporation or by any other name) or a cantonment board, but does not include—

(1) ...... ...........

(3) any house which the assessee may occupy for the purposes of any business or profession carried on by him;

..........

(v) urban land; ............. Explanation.—

(a) .........

(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 sub-clause (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 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