IN HIGH COURT OF JUDICATURE AT MADRAS

DATED: 08.06.2015

CORAM:

HONOURABLE MR.JUSTICE R.SUDHAKAR
AND
HONOURABLE MS.JUSTICE K.B.K.VASUKI

T.C. (A) Nos.168 to 170 of 2015

The Commissioner of Income Tax,
Chennai. ... Appellant

Vs

M/s.MIL Industries Ltd,
25A Industrial Estate, Ambattur,
Chennai 600 098. ... Respondent



Prayer:- These Tax Case (Appeals) are filed, against order of the

Income Tax Appellate Tribunal, Madras "B" Bench, Chennai dated

29.7.2011 in WTA Nos.42/Mds/2010, 44/Mds/2010 and 43/Mds/2010

respectively.

For Appellant : Mr.T.R.Senthilkumar

COMMON JUDGMENT

(Judgment was delivered by K.B.K.VASUKI, J.)

All these Tax Case Appeals are filed by Revenue against the

order of Tribunal, relating to Assessment Years 2003-04,

2004-05 and 2005-06 respectively, raising following questions of

law :
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1) Whether on facts and circumstances of the
case, Tribunal was right in upholding order of the
CIT(A) who directed assessing officer to exclude the
value of land at Ambattur while computing net
wealth of assessee?
2) Whether on facts and circumstances of the
case, land sold at Ambattur would fall within the
exclusion clause of proviso to Section 2(ea) of Wealth
Tax Act?


2.The issue that arises for consideration herein is as to whether

the land at Ambattur sold by assessee would fall within the

exclusion clause of Section 2(ea) of Wealth Tax Act?



3.It is contention of assessee that every part of land

sold comprise of factory building i.e. administrative and research and

development block and considering nature of use to which the

land sold prior to sale, it cannot be treated as urban land and the

levy of wealth tax on entire portion of land is hence against

law. Whereas, according to Revenue, constructed area was

very less and highly disproportionate as compared to total area of

the land, as such, land in question is not exclude under Section

2(ea) of Wealth Tax Act.
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4.While Assessing Officer, accepting contention of the

Revenue, levied Wealth Tax, learned CIT(A) set aside order of

the Assessing officer, on basis of remand report of the

Assessing Officer. Tribunal, on basis of remand report

obtained from Assessing Officer and objections filed by the

assessee on such report and after duly appreciating facts and

circumstances involved in present case, in light of relevant

provisions of law under Wealth Tax Act, dismissed appeals filed by

the Revenue, thereby upheld order of learned CIT(A).



5.The Tribunal, in para 7 of impugned order extracted

paras 20 to 24 of order of learned CIT(A) and found same

to be well reasoned order by considering all materials and to be

based on materials. Tribunal was of view that there was no

infirmity or flaw in order passed by learned CIT(A). The

relevant paras 7 and 8 of impugned order of Tribunal are

reproduced hereunder:



7.We have heard both sides, considered the
material on record and also gone through relevant
provisions of law as well as approved site map filed before
Assessing Officer and copy placed before us and find
that ld.CIT(A), while considering plea of the
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assessee in light of remand report obtained from the
Assessing Officer and objections filed by assessee has
concluded to exclude such land from definition of asset
as per proviso to section 2(ea) of Wealth Tax Act. The
relevant paras from 20 to 24 reproduced as under :
20. I have carefully considered arguments of the
Ld AR and Remand Report of Assessing Officer and
also records and documents before me. I find that
the argument of Appellant that lands sold during
the assessment years 2005-06 and 2006-07 cannot be
treated as urban land or unused land has some force. As
can be seen from plan submitted before me and the
Assessing Officer, land was purchased by Appellant
for purpose of putting up factory at Ambattur and in
fact Appellant has put up factory as can be seen
from plan submitted. plan submitted by the
Appellant clearly indicates various construction on the
land at Ambattur as well as purpose for which other
portion of land have been earmarked including the
lands sold during assessment year 2005-06 and 2006-07.


21.I find that argument of Assessing Officer
that only 31100sq.ft of land can be said to be covered by
building constructed with approval of concerned
authorities and that balance land is to be treated as
vacant unused land is misconceived. In any land, the
owner has to leave certain portion of land in
accordance with regulations governing the
constructions at place where land situated. It is
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also necessary that owner has to provide for parking
space for executives, visitors and also0 for the
employees which is true in all buildings constructed.


22.Every building has to have open space for the
proper enjoyment of buildings constructed on land.
In this sense, argument of Ld AR has force that
once building is constructed on land, then it ceases to
be vacant land and becomes land and building. reading
of provisions of Section 2(ea) would make it clear that
the terms urban land does not include land on which any
building is constructed.


23.In this connection, it may be appropriate to refer to
the observations of Delhi High Court in case of CWT
vs. D.C.M.Ltd., (290 ITR 615) wherein at page 621, the
said High Court has held as under :
In maxim, generalia verba sunt generaliter
interlligenda it would be helpful precept to
interpretation of provisions which uses words
of general would have to be construed generally. The
intention of Legislature appears to be that land
which falls within exception afore referred would
have to be excluded form ambit and scope of the
expression urban land. Once land or any
building thereupon making it combination of land
and building is not urban land, then it could not be an
asset as defined under Section 2(ea) of Act.
24.In view of foregoing provisions of law and
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having regard to facts and circumstances of case. I
hold that Assessing Officer erred in treating entire
land as well as lands sold during assessment years
2005-06 and 2006-07 as urban land and including the
same in net wealth of Appellant. Assessing
Officer is directed to exclude value of land at
Ambattur while computing net wealth of Appellant.


8.From perusal of conclusion of ld.CIT (A)
as reproduced above. It is seen that he has passed well
reasoned order by considering each and every aspect of
matter in light of factual aspect, which has also
been properly demonstrated by ld. Counsel for the
assessee before us while referring to approved site
map of Superintendent of Central Excise. No infirmity or
flaw has been pointed out by ld.Dr or noticed by us in
conclusion as drawn by ld.CIT(A). Therefore, in
view of facts, circumstances and material on record, we
concur with finding and conclusion of ld.CIT(A) and
uphold his action while dismissing appeals of the
Department being devoid of any merits.



6.Thus, as issue involved herein being pure question of fact

and as both Appellate Authorities, after verifying records,

arrived at such conclusion, we find no question of law much less any

substantial question of law arises for consideration in these appeals.
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7.Accordingly, all these tax case Appeals are dismissed. No costs.



[R.S.J.] & [ K.B.K.V.J.]
08.06.2015.
Index:Yes/No
Web:Yes/No
rk

To
The Income Tax Appellate Tribunal Chennai-'B' Bench, Chennai.
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R.SUDHAKAR, J.
AND
K.B.K.VASUKI, J.

rk




T.C. (A) Nos.168 to 170 of 2015




08.06.2015.
Commissioner of Income Tax, Chennai v. M/s. MIL Industries Ltd