THE COMMISSIONER OF WEALTH TAX vs. M/S. SNOWMAN FROZEN FOODS PVT. LTD.
What did the High Court hold?
The High Court held that the Tribunal's finding on the lands occupied by freezer units was perverse. The Court noted that the assessee had not produced any evidence before the lower authorities to show that these lands were occupied by buildings or that they were beyond the prescribed limits. The Tribunal erred in shifting the burden of proof to the Revenue to demonstrate the presence of buildings. Since no evidence was produced by the assessee, the High Court found in favour of the Revenue. The assessment was restored to the extent of the value of urban land other than the land at Chandigarh. The appeals filed by the Revenue (WTA Nos. 2 and 3 of 2012) concerning the Chandigarh property were dismissed, upholding the exclusion of that property from wealth tax assessment based on facts and evidence produced by the assessee. The appeals filed by the Revenue (WTA Nos. 1 and 4 of 2012) concerning other urban lands were allowed.
What were the facts?
These four appeals by the Commissioner of Wealth Tax relate to assessment years 2001-02 and 2004-05. The core issue concerns the valuation of urban land owned by the assessee, M/s. Snowman Frozen Foods Pvt. Ltd. (now M/s. Snowman Logistics Ltd.), as per Section 2(ea) Explanation I (b) of the Wealth Tax Act, 1957. The total value of urban land in dispute for both assessment years was Rs. 1,71,01,208/-. The assessee contended that certain lands were situated beyond prescribed limits or occupied by freezer units, thus not qualifying as vacant urban land. The First Appellate Authority excluded the Chandigarh property from wealth tax assessment, finding it situated beyond the limit. The Tribunal upheld the exclusion of the Chandigarh property but found a lack of clarity regarding other lands occupied by freezer units, shifting the burden of proof to the Revenue. The High Court noted no appearance from the assessee.
What were the issues?
1. Whether the Tribunal erred in its finding regarding the lands occupied by freezer units, and if the burden of proof was wrongly shifted to the Revenue (mixed question of law and fact, concerning Section 2(ea) Explanation I (b) of the Wealth Tax Act, 1957). Assessee's contentions (as inferred from the judgment's discussion of the lower authorities' orders and the Tribunal's findings): The lands were either situated beyond the 8 Kms limit from the municipality or were occupied by freezer units, and therefore, could not be treated as vacant land under the Explanation to Section 2(ea). Revenue's contentions (as inferred from the judgment's discussion): The assessee failed to produce sufficient evidence to demonstrate that the lands were beyond the prescribed limits or occupied by buildings. The Tribunal wrongly shifted the burden of proof to the Revenue to show that the lands were not occupied by buildings.
Which sections of the Income-tax Act were involved?
Section 2(ea)
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 WTA.No. 1 of 2012 AGAINST THE ORDER/JUDGMENT IN OTHERS 5/2009 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 21-10-2011 APPELLANT/S: THE COMMISSIONER OF WEALTH TAX BANGALORE-III, BANGALORE. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S. SNOWMAN FROZEN FOODS PVT. LTD. (NOW KNOWN AS M/S SNOWMAN LOGISTICS LTD) BRISTOW ROAD, WILLINGTON ISLAND, COCHIN 682003. OTHER PRESENT: SRI PKR MENON SR FOR GOI TAXES THIS WEALTH TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH WTA.4/2012, WTA.3/2012, WTA.2/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.T.A Nos.1,2,3 &4/2012 2 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 WTA.No. 4 of 2012 AGAINST THE ORDER/JUDGMENT IN OTHERS 6/2009 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 21-10-2011 APPELLANT/S: THE COMMISSIONER OF WEALTH TAX BANGALORE III, BANGALORE. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S: M/S. SNOWMAN FROZEN FOODS PVT. LTD. (NOW KNOWN AS M/S. SNOWMAN LOGISTICS LTD) BRISTOW ROAD WILLINGTON ISLAND COCHIN 682 003. THIS WEALTH TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH WTA.3/2012, WTA.2/2012, WTA.1/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.T.A Nos.1,2,3 &4/2012 3 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 WTA.No. 3 of 2012 AGAINST THE ORDER/JUDGMENT IN OTHERS 7/2009 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 21-10-2011 APPELLANT/S: THE COMMISSIONER OF WEALTH TAX BANGALORE-II, BANGALORE. BY ADV.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S. SNOWMAN FROZEN FOODS PVT. LTD. (NOW KNOWN AS M/S. SNOWMAN LOGISTICS LTD.) BRISTOW ROAD, WILLINGTON ISLAND, COCHIN-682 003. THIS WEALTH TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH WTA.4/2012, WTA.2/2012, WTA.1/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.T.A Nos.1,2,3 &4/2012 4 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA, 1940 WTA.No. 2 of 2012 AGAINST THE ORDER/JUDGMENT IN OTHERS 8/2009 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 21-10-2011 APPELLANT/S: THE COMMISSIONER OF WEALTH TAX BANGALORE-III, BANGALORE. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S: M/S. SNOWMAN FROZEN FOODS PVT. LTD. (NOW KNOWN AS M/S. SNOWMAN LOGISTICS LTD), BRISTOW ROAD, WILLINGTON ISLAND, COCHIN-682 003. THIS WEALTH TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH WTA.4/2012, WTA.3/2012, WTA.1/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.T.A Nos.1,2,3 &4/2012 5 W.T.A Nos.1/2012, 2/2012, 3/2012 & 4/2012 J U D G M E N T Vinod Chandran, J The four appeals under the Wealth Tax Act, 1957 (for brevity “the Act”) relate to two assessment years, 2001-02 and 2004-05. There is no appearance for the assessee-respondent despite notice. We, hence, heard the learned Senior Counsel, Government of India (Taxes). 2. The issue in both the assessment years is with respect to the assessments made on urban land owned by the assessee as covered by the definition clause Section 2(ea) Explanation I (b) as it stood at that point of time. The value of urban land is taken as Rs.1,71,01,208/- for both the assessment years as on the valuation date.
W.T.A Nos.1,2,3 &4/2012 6 With respect to the land at Chandigarh, it was found that the same is situated 10 Kms outside the limits of the Municipality. As to the other lands the First Appellate Authority found that no details were furnished by the appellant to show that these are vacant urban land. In fact the specific contention taken by the appellant before the First Appellate Authority was that the lands were situated beyond the 8 Kms limit and also that the lands were occupied by freezer units and hence cannot be treated as a vacant land as provided under the Explanation to Section 2(ea). 3. The First Appellate Authority found, on the basis of the documents produced with respect to Chandigarh property, that it existed beyond the limit as provided in Explanation I. The value of the said land was directed to be excluded when assessment is carried out. With respect to the balance addition on the value of urban land, the
W.T.A Nos.1,2,3 &4/2012 7 addition made by the Assessing Officer stood confirmed. 4. The appeal before the Tribunal was by the assessee as also the Revenue. With respect to the Chandigarh property, the Tribunal found no reason to interfere with the first appellate order. We also find no reason to interfere with the order insofar as the Chandigarh property since, it is on facts and based on the evidence produced by the assessee. We hence answer the questions of law framed in WTA Nos.2 and 3 of 2012, being appeals of the Revenue from WTA 7 & 8/Coch/2009; against the Revenue and in favour of the assessee. Those appeals are hence dismissed. 5. WTA Nos.1 and 4 of 2012 are against the appeals of the assessee before the Tribunal, numbered as WTA Nos.5 & 6/Coch/2009, wherein the question of addition with respect to the urban land other than the land in Chandigarh was raised. We
W.T.A Nos.1,2,3 &4/2012 8 see that the Tribunal had posed a question to itself as to the land in which the freezer units were built and run. The Tribunal then found that there is no clarity in the order of the lower authorities with respect to the buildings existing in the said land. As we noticed when we discussed the First Appellate Authority's order, it is specifically noticed that no evidence was produced with respect to the other lands;as to whether they are beyond the limit as prescribed in Explanation I or are occupied with buildings. No approval for such construction or licences for carrying on business of freezing units were produced by the assessee. In such circumstance, the Tribunal went wrong in finding that there was lack of clarity in the order of the lower authorities. In fact, the lower authorities did not say anything about the lands being occupied by buildings because the assessee did not produce any evidence to show that.
W.T.A Nos.1,2,3 &4/2012 9 In such circumstances, we are of the opinion that the finding of the Tribunal on facts is perverse. The Tribunal ought not to have shifted the burden of proving that the lands were occupied with buildings, on to the shoulders of the Revenue. We see that there is no appearance before this Court and there is no production of any evidence with respect to lands, the value of which was added on, being occupied with buildings. We hence answer the question of law in favour of the Revenue and against the assessee. We hence allow WTA Nos.1 and 4 of 2012. We restore the assessments to the extent of the value of urban land other than that at Chandigarh. Ordered accordingly. No order as to costs. Sd/- K. Vinod Chandran, Judge Sd/- Ashok Menon, jma Judge
W.T.A Nos.1,2,3 &4/2012 10 APPENDIX OF WTA 1/2012 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 30.3.2007. ANNEXURE B TRUE COPY OF THE ORDER OF COMMISSIONER OF WEALTH TAX (APPEALS)-II, KOCHI DATED 19.3.2009. ANNEXURE C CERTIFIED COPY OF THE ORDER OF THE TRIBUNAL DATED 21.10.2011 AND COPY OF THE ORDER OF THE TRIBUNAL.
W.T.A Nos.1,2,3 &4/2012 11 APPENDIX OF WTA 4/2012 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 27.12.2007. ANNEXURE B TRUE COPY OF THE ORDER OF COMMISSIONER OF WEALTH TAX (APPEALS)-II, KOCHI DATED 19.3.2009. ANNEXURE C COPY OF THE ORDER OF THE TRIBUNAL DATED 21.10.2011.
W.T.A Nos.1,2,3 &4/2012 12 APPENDIX OF WTA 3/2012 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 30.3.2007. ANNEXURE B TRUE COPY OF THE ORDER OF COMMISSIONER OF WEALTH TAX (APPEALS)-II, KOCHI DATED 19.3.2009. ANNEXURE C COPY OF THE ORDER OF THE TRIBUNAL DATED 21.10.2011.
W.T.A Nos.1,2,3 &4/2012 13 APPENDIX OF WTA 2/2012 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF THE ASSESSMENT ORDER DATED 27.12.2007. ANNEXURE B TRUE COPY OF THE ORDER OF COMMISSIONER OF WEALTH TAX (APPEALS)-II, KOCHI DATED 19.3.2009. ANNEXURE C COPY OF THE ORDER OF THE TRIBUNAL DATED 21.10.2011.
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