Agricultural land not treated as 'asset' under the Wealth Tax Act
Agricultural land not treated as 'asset' under the Wealth Tax Act
During assessment proceedings, AO brought various lands held by assessee and shown as agricultural land to treat them as 'taxable assets'. CIT(A) partly deleted the additions. ITAT confirmed CIT(A)'s order and held that the land was classified as agricultural land and agricultural operations were also being carried on, and it cannot be treated as 'asset' under the Wealth Tax Act.-501227
1. AO had made additions under three heads: Lands claimed as agricultural land treated as capital asset; Buildings other than self-occupied; and Plot of land (vacant land). While completing the assessment on the basis of the statement issued by assessee, Assessing Officer (AO) had brought various lands held by assessee and shown as agricultural land to treat them as 'taxable assets'.
2. CIT(A) partly deleted the additions.
3. On appeal, the ITAT held as under:
"In fact the ground raised by the Revenue is not maintainable in the sense, that linking of agricultural income to agricultural land is not required and therefore, Ld. CIT(A) is not bound to do that exercise which is not prescribed by the Act. It is the AO who should have examined these matters at the time of assessment and should have verified whether the land is classified as 'agricultural land' or not? Then, the question of agricultural operations comes into picture. As seen from the assessment order, AO has not even discussed, why he is treating the agricultural land as 'asset', and how the provisions of the Act apply. As can be seen from the above, the land is classified as agricultural land and agricultural operations were also being carried on. Since the land-in-question cannot be treated as 'asset' under the Wealth Tax Act, we do not see any reason to interfere with the order of the CIT(A). There is no merit in the Revenue's grounds. Accordingly, the same is dismissed.
When assessee is offering the rental income from the buildings and those properties which are not to be included as assets were included in the definition of asset without any discussion by the AO, we are of the opinion that Ld. CIT(A) has correctly examined and deleted the addition, which cannot be made at the first instance. We do not find any merit in the Revenue's ground. Accordingly, the same is rejected.”
Case Reference - Wealth Tax Officer vs Sri Ch. Gopal Reddy
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "A", HYDERABAD
BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND
SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
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