Wednesday, 12 December 2018

HC : Upholds wealth tax on urban land; Development permission requirement only a restriction, not prohibition

Bombay HC confirms ITAT order, upholds wealth tax liability on urban land, construction on which requires permission from Competent Authority under Tamil Nadu Town Planning Act; Rejects assessee's contention that relevant land was covered under exclusion for urban land on which construction of a building is not permissible under any law in force; HC distinguishes between a case where the construction of a building is not permissible under any law for the time in force and where construction though permissible, must be preceded by permission, approval or sanction from the prescribed authority, holds that requirement of permission for construction would not make construction impermissible; Observes that restriction and prohibition are two different concepts and building regulations may amount to restriction on land development but not prohibition, thus holds that if assessee's contention is to be accepted, it would paramount to adding a requirement in the exclusion clause, which the legislature has not yet prescribed.:HC 

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