Only land with completed buildings qualifies for exemption from wealth tax; land under construction is considered urban vacant land and subject to tax.

JUDGMENT :

R. SURESH KUMAR, J.

The aforestated Tax Case (Appeals) were admitted on the following Substantial Questions of Law :

"(i) Whether on the facts and circumstances of the case, the Tribunal was right in holding that the land remained vacant land in as much as the construction of the building was not completed as on relevant valuation date the said land would not be liable to be charged for wealth tax under Section 2(ea) of the Wealth Tax Act?

(ii) Whether the assessee would be entitled to exemption under the Wealth Tax Act, if the building construction is not completed by the end of relevant previous year as the building was under construction as a business asset?

(iii) Whether the land on which a complete building would alone qualify for exemption or not ?

(iv) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee's 'vacant urban land' is not an 'asset' and not liable to tax under Section (ea) of the Wealth Tax Act?

(v) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that even a 'building under construction' exempts the land being assessed as 'vacant urban'from the Wealth Tax provisions?"

2. Since these Appeals were filed by the Revenue against the same Assessee in respect of three Assessment Years, i.e., 2007-08, 2008-09 and 2009-10 under Section 27A of the Wealth Tax Act, 1957, all these Appeals were heard together and are disposed of by this common order.

3. The necessary facts which are required to be noticed for the disposal of these Appeals are as follows :

3.1. The respondent Assessee, herein after called as “Assessee Company” develops and maintains commercial complexes which had not filed any Wealth Tax Return initially. Since the assessing authority formed reasons to believe that its wealth is liable to be assessed, since had escaped assessment, he issued a notice under Section 17(1) of the Wealth Tax Act (hereinafter referred to as “the Act”) on 04.08.2010. The Assessee/Respondent filed a return of wealth on 15.09.2010 declaring Nil wealth.

3.2. The Assessee has taken out a vacant land admeasuring 10.64 acres from its sister concern namely Express Newspapers Pvt., Ltd., in short, “the Lessor” on 18.01.2006. Thereafter the lease was surrendered by the Assessee on 26.03.2007, on the same date, i.e., 26.03.2007, a sale was effected to the extent of 9.59 acres, out of the total 10.64 acres and the remaining land had been entrusted to the Chennai Metropolitan Development Authority [CMDA] for public purposes.

3.3. The consideration had been shown as Rs.225 Crores for the said sale under which the land to the extent of 9.59 acres of vacant land had been transferred to the Assessee company. In the said vacant land, the Assessee raised construction of a shopping mall and the construction went on up to 2010 and in May 2010, the shopping mall after full construction was inaugurated.

3.4. Only in this context, it is the stand of the Revenue, i.e., Assessing Authority that, the land where construction had been made and completed only in May 2010 was considered to be a vacant urban land liable to be assessed an asset under Section 2(ea) of the Act, which alone culminated in the notice under Section 17(1) of the Act issued by the Assessing Authority.

3.5. It is in this context the issue had come up or carried to the ITAT, Chennai in W.T.A.No.4/MDS/2013 in respect of the Assessment Year 2007-08 and W.T.A.No.7 and 8/MDS/2013 in respect of the Assessment Years 2008-09 and 2009-10.

3.6. It is to be noted that, the Tribunal in fact disposed W.T.A.Nos.7 and 8 of 2013 by a common order, dated 30.09.2013, whereby the ITAT having followed the dictum of this Court, which is the jurisdictional High Court in the case of Wealth Tax v. Rohini Hotels (Madras) Limited, reported in 2011 SCC Online Mad 1542, dismissed the Appeals filed by the Revenue in this regard.

3.7. However, the W.T.A.No.4/Mad/2013 for the Assessment Year 2007-08 w