Case Note & Summary
The appeals arose from a common order dated 13 February 2004 of the Income Tax Appellate Tribunal, Panaji, concerning wealth tax assessments of several family members who were co-owners of a coastal property in Goa. The property, known as 'Rajabaga' or 'Quindelibaga', was sold in 1994 for Rs. 3,27,49,000. In response to notices under Section 17(1) of the Wealth Tax Act, 1957, the appellants filed wealth tax returns claiming that a large portion of the property abutting the Arabian Sea and a river fell within 500 metres of the High Tide Line and, due to CRZ Regulations under the Environment (Protection) Act, 1986, was not buildable. Consequently, they argued that only the buildable portion could be considered 'urban land' under Section 2(ea)(v) of the Wealth Tax Act and be included in their taxable wealth. The Assessing Officer rejected this contention, treating the entire property as urban land. The appeals before the High Court raised the sole legal issue of whether the non-buildable coastal zone could be excluded from the purview of 'urban land' for wealth tax purposes. The excerpt from the judgment ends before recording the court's analysis and decision.
Headnote
A) Wealth Tax - Definition of Urban Land - Exclusion of Non-Buildable Coastal Zone - Wealth Tax Act, 1957, Section 2(ea)(v) - Assessee contended that property within 500m of HTL is not buildable under CRZ Regulations framed under Environment (Protection) Act, 1986, hence cannot be treated as urban land - Assessing Officer rejected the contention and included entire property as urban land - High Court examined whether non-buildable portion can be excluded (Paras 2-3).
Issue of Consideration
Whether the non-buildable portion of a coastal property, falling within 500 metres of the High Tide Line as per CRZ Regulations, can be excluded from the definition of 'urban land' under Section 2(ea)(v) of the Wealth Tax Act, 1957?
Law Points
- interpretation of Section 2(ea)(v) of the Wealth Tax Act
- 1957
- meaning of urban land
- exclusion of non-buildable area under CRZ Regulations
- valuation of property for wealth tax
Case Details
2010 LawText (BOM) (08) 122
Tax Appeal Nos. 12 to 31 of 2004
Shri Prabhakar Keshav Kunde & Ors.
The Commissioner of Income Tax & Anr.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Tax appeals against common order of Income Tax Appellate Tribunal regarding wealth tax assessments of coastal property.
Remedy Sought
The appellants sought to exclude the non-buildable portion of the coastal property from wealth tax assessment as urban land under the Wealth Tax Act, 1957.
Filing Reason
The Assessing Officer included the entire property as urban land despite the appellants' contention that CRZ Regulations rendered a large part non-buildable, thus not falling within the definition of 'urban land' under Section 2(ea)(v) of the Wealth Tax Act.
Previous Decisions
The Income Tax Appellate Tribunal, Panaji Branch, Panaji, passed a common order dated 13 February 2004, which is under challenge in these appeals.
Issues
Whether the non-buildable portion of a coastal property falling within 500 metres of the High Tide Line, as per CRZ Regulations, can be excluded from the definition of 'urban land' under Section 2(ea)(v) of the Wealth Tax Act, 1957?
Submissions/Arguments
The appellants contended that the portion of the property within 500 metres of the Arabian Sea and river was not buildable due to CRZ Regulations framed under the Environment (Protection) Act, 1986, and therefore could not be treated as urban land under the Wealth Tax Act. Only the buildable approximately 10% of the property should be considered urban land and included in computing wealth tax.
Judgment Excerpts
The Appellants are family members and were co-owners of the property surveyed under No. 28/1 admeasuring 1,66,750 square metres, Survey no. 33/1 admeasuring 39,700 square metres and Survey no. 33/2 admeasuring 550 square metres, known as “Rajabaga” or “Quindelibaga”, situated at Village Nagorcem, Palolem.
He claimed that the value of the said property was Rs.86,600/- and declared the value of one fourth share therein to be Rs.21,400/-.
According to him, the said property was abutting Arabian Sea on the western side and abutting a river on the northern side. In view of the Environment (Protection) Act, 1986, a large portion of the said property abutting and falling within 500 metres of the Arabian Sea and the river was not build-able.
Procedural History
The Assessing Officer passed orders including the entire property as urban land. The appellants appealed to the Commissioner of Income Tax (Appeals) and subsequently to the Income Tax Appellate Tribunal, which passed a common order on 13 February 2004. Aggrieved, the appellants filed the present appeals before the High Court under Section 27A of the Wealth Tax Act.
Acts & Sections
- Wealth Tax Act, 1957: Section 17(1), Section 2(ea)(v)
- Environment (Protection) Act, 1986:
