Law:

Section:

Section 2(ea) of the Wealth-tax Act, 1957 - Assets - Assessment year 1995-96 - Whether a farm land, on which construction was not permissible under municipal law, would not be included in definition of 'urban land' chargeable to wealth-tax, even though assessee had constructed a farm house on said land - Held, yes FACTS The assessee owned a land which was located in Sainik Farm which was in an agricultural belt. The assessee had done construction on the said land. The Assessing Officer as well as the appellate authority took the value of the said land on the basis of alleged agreement to sell. The Tribunal held that the land belonging to the assessee was not covered within the definition of 'urban land' and it could not be treated to be an asset taxable under the Act, as no construction was permissible in the whole of the Sainik Farm area under the municipal bye-laws. On revenue's appeal : [ HELD The construction raised by the assessee was not in pursuance of the scheme created by any competent authority in law. In fact, no construction on the land was permissible. Such land was excluded by the definition of expression 'urban land' as per the provisions of theExplanation 1(b) to section 2(ea). [Para 4] The aforesaid provision was enforced on 1-4-1993. It clarifies that any land on which construction of building is not permitted under any law for the time being in force in the area in which such a land is situated, is not to be included in the expression 'urban land'. It further provides that the land occupied by any building which has been constructed with the approval of the appropriate authority would also not be included in the expression 'urban land'. Even on the first principle and on the plain perusal of the provisions, the land belonging to the assessee stood excluded from the definition of 'urban land'. Therefore, the farm house constructed on the farm land would not be regarded as 'urban land' as no construction was permissible on such land. No question of law, much less a substantive question of law arose for the determination of the Court. Accordingly, the appeal was to be dismissed. [Para 5] CASE REVIEW CWT v. DCM Ltd. [2007] 290 ITR 615/[2005] 147…

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