Case Law Details
Brief of the case:
Madras High Court held in CIT Vs M/s MIL Industries Ltd that the vacant land left on constructed property as per the construction plan of that property would not be treated as a vacant urban land because the vacant land left was the requirement of the construction plan, failing which was not possible to construct the property.
Facts of the case:
Assessee was having a land on which he had constructed a factory and some part of the land left vacant which was included by the AO in the net wealth of the assessee but the assessee argued that there used to be the condition of the municipal corporation that some part of the land had to be left vacant so the same had to be included in the proviso to sec 2(ea), in other words the vacant land had to be excluded from the definition of the asset. But revenue on the other hand argued that as the land was left vacant so the same had to be included in the net wealth of the assessee.
Contention of the assessee:
Assessee was of the view that on the land, factory was constructed according to the plan approved by the municipal authorities and as per the approved plan some vacant land had to be left while construction of a building which the assessee had kept .So the AO was wrong in considering the vacant land in the net wealth of the assessee because it was not a vacant land it was the factory building.
Contention of the revenue:
Revenue was of the view that vacant land had to be included in the definition of the asset as per the wealth tax act , So as the factory had not been constructed on the whole of the land so the same had to be included in the definition of the asset as per the wealth tax act.
Held by Hon’ble high Court:
High Court held that as the factory had been constructed on the land as per the approved plan of the local authorities and as per the approved plan some part of land had to be kept vacant, so the vacant land had to be considered as land & Building because on the land, building had been constructed which is not an asset as per the wealth tax act, So ITAT was right in upholding the appeal of CIT(A).
