Umaben Shaileshbhai Sheth vs. DCWT ITAT Ahmedabad `D’ Bench Before A. Mohan Alankamony (AM) and Kul Bharat (JM) ITA No. 44 to 49/Ahd/2010 A.Y.: 2000-01 to 2005-06. Decided on: 4th October, 2013. Counsel for assessee/revenue: Vijay Ranjan/K. C. Mathews.

Facts: The assessee had joint share in a plot of land, admeasuring 567 sq. mts., allotted by Urmi Society, along with her husband. She was a joint shareholder as well. The Assessing Officer (AO) accepted that the assessee is the owner of half portion of the land but he denied the benefit of exemption to section 5(1)(vi) in an order passed u/s 24 r.w.s. 17 r.w.s. 16(3) of the Wealth-tax Act, 1957 (WT Act).

Aggrieved, the assessee preferred an appeal to the CWT(A) who dismissed the appeal filed by the assessee on the ground that the assessee and her husband had disclosed the value of the plot of land in their taxable wealth while filing returns of net wealth for AYs 2006- 07 and 2007-08 and therefore, how can the value of the said plot be exempt in earlier years. He held that the market value of the plot of land allotted by Urmi Society is includible in taxable wealth.

Aggrieved, the assessee preferred an appeal to the Tribunal.

Held: The Tribunal noted that the CWT(A) had not given any basis as to how the proviso to section 5(1)(vi) is not applicable when there is a finding of fact by the AO that the assessee is treated owner of land less than 500 sq. mts. The only basis of denial of exemption by the CWT(A) was that the assessee had not filed the wealth-tax return for the earlier period. The Revenue had not placed reliance on any judicial pronouncement or on any provision of law to deny exemption. It further noted that as per proviso to section 5(1)(vi) of the WT Act, if plot of land is comprising an area of 500 sq. mts or less then no wealth-tax shall be payable by an assessee.

The Tribunal held that admittedly, the assessee has been treated as owner of one-half share in a plot of land admeasuring 567 sq. mts, therefore the right of the assessee is lesser than 500 sq. mts. The assessee cannot be fastened with a liability of tax which otherwise cannot be fastened under the WT Act. It held that on this piece of land, no wealth-tax is payable by the assessee in terms of proviso to section 5(1)(vi). It held that the CWT(A) erred in not granting exemption under proviso to section 5(1)(vi) of the WT Act. It directed the AO to allow exemption.

The appeal filed by the assessee was allowed.