COMMISSIONER OF INCOME TAX DEL vs. ARUN KUMAR & SONS

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WTA/14/2005HC DelhiDLHC01074688200504 January 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the value of land on which an incomplete building exists is to be included within the definition of 'assets' under Section 2(ea) of the Wealth Tax Act, 1957. The Court answered the framed question of law against the assessee and in favour of the Revenue. The reasoning was based on the precedent set by the Supreme Court in Giridhar G. Yadalam vs. Commissioner of Wealth Tax and the High Court's own prior judgment in Commissioner of Wealth Tax vs. Veena Rani, which dealt with an identical question. The ratio decidendi is that land forming the site of a building, even if incomplete, constitutes an asset for wealth tax purposes. Consequently, the appeal filed by the Revenue was allowed.

What were the facts?

This case involves an appeal by the Commissioner of Income Tax (Revenue) against the assessee, Arun Kumar & Sons. The assessment year(s) are not explicitly stated. The order or action under challenge is an appeal before the High Court of Delhi. The procedural history involves the Revenue filing an appeal against a decision concerning the valuation of assets for wealth tax purposes. The core issue revolves around whether the value of land with an incomplete building should be excluded from the definition of 'assets' under the Wealth Tax Act, 1957. The High Court noted that an identical question was decided in the case of Commissioner of Wealth Tax vs. Veena Rani (WTA 1 of 2004), which was disposed of in favour of the Revenue.

What were the issues?

1. Whether the value of land on which an incomplete building exists is to be excluded from the definition of 'assets' under Section 2(ea) of the Wealth Tax Act, 1957? Assessee's contentions: The judgment does not record any specific contentions made by the assessee. Revenue's contentions: The Revenue argued that the value of land with an incomplete building should be included within the definition of 'assets' under Section 2(ea) of the Wealth Tax Act, 1957. The Revenue relied on the Supreme Court's decision in Giridhar G. Yadalam vs. Commissioner of Wealth Tax, (2015) 1 SCC 664, and the High Court's own prior decision in Commissioner of Wealth Tax vs. Veena Rani, WTA 1 of 2004.

Which sections of the Income-tax Act were involved?

2(ea)

AI-generated summary — verify with the full judgment below

$~8 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ WTA 14/2005

COMMISSIONER OF INCOME TAX DEL ..... Petitioner Through: Mr. Zoheb Hossain, Sr. Standing Counsel for the Revenue.

versus

ARUN KUMAR & SONS

..... Respondent

Through: Mr. P. Roychaudhuri, Advocate

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

04.01.2018

It is brought to the notice of the Court that the question of law framed in the case is whether the value of the land on which an incomplete building exists is to be excluded from the definition of “assets” under Section 2(ea) of the Wealth Tax Act, 1957. An identical question was framed in the case of co-owner of the Society involved in the appeal Commissioner of Wealth Tax vs. Veena Rani, WTA 1 of 2004. The Court had disposed of that appeal by answering the question in favour of the Revenue on 03.08.2016. In doing so, the judgment on the identical question in Giridhar G. Yadalam vs. Commissioner of Wealth Tax, (2015) 17 SCC 664, was relied upon. WTA 14/2005

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Following the said judgment, the question of law framed in this case, is answered against the assessee and in favour of the Revenue. The appeal, therefore, succeeds and is allowed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J JANUARY 04, 2018 nn

WTA 14/2005

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