HC : Entering into JDA cannot make vacant land 'business asset'; Upholds wealth-tax levy

Andhra Pradesh and Telangana HC upholds taxation of vacant land purchased by assessee-individual during AY 2009-10 for wealth tax purpose, rejects assessee’s stand that entering into JDA with developer immediately after the land-purchase proved his intention of carrying on business and therefore land should be treated as ‘stock in trade’; Clarifies that mere execution of a development agreement would not by itself mean that the land-owner also intended to carry on business, also observes that purchase of property was an isolated transaction and assessee had not carried on any business either before or after; Notes that assessee had filed return in ITR-2 [prescribed form for individuals/ HUFs not having business income] which also lent support to Revenue’s contention that he intended to treat the subject land only as an investment, also notes that land was not disclosed as stock in trade in balance sheet; With respect to assessee being not subjected to capital gains tax u/s. 45 of the Income Tax Act, HC clarifies that “whether execution of a JDA had resulted in the transfer of the asset liable to tax as capital gains under..the Income Tax Act, is wholly extraneous to the present proceedings under the Wealth Tax Act.”;:HC