ITAT Quashes Wealth Tax Proceedings since Ownership of the Land was in Dispute [Read Order]

Wealth Tax - Kerala High Court - Taxscan

Hyderabad bench of Income Tax Appellate Tribunal (ITAT) recently held that wealth tax proceedings cannot be proceed against the assessee when the ownership of the land is in dispute.

Assessee in the instant case is an individual entered into an agreement of sale of property of his own. It is a ten acres of land for a consideration of 1 crore. It was found and seized by the Assessing Officer (AO) during the course of assessment proceedings and accordingly wealth tax assessment was reopened under section 17 of the Wealth Tax Act. And also adopted the taxable wealth at Rs. 3.35 Crores based on the adoption of market value for the 10 acres of land stated to be in the ownership of assessee as per the agreement of sale.

Assessee contended that possession of land was not handed-over; there were disputes about ownership of the land, as the said land was occupied by various other organizations including Government and the original allottee was no more and assessee along with his brother also should have equal shares and the entire amount cannot be brought to tax in his hand.

After considering the rival submissions the bench comprising of Vice President D.Manmohan and Accountant Member B.Ramakotaiah observed that the assessee has successfully proved that ownership of the aforementioned land was in dispute. The tribunal bench further noted that while perusing the material facts it is clear that the land is shown as Government land and in fact, was allotted to various other persons by the Government.  ”Therefore, the ownership of the land is in dispute. In this situation it is not possible to calculate the market value of the property,” the bench said.

Subscribe Taxscan Premium to view the Judgment
taxscan-loader