Wealth tax Applicability.

Prashant Ramesh Surve (Querist) 17 March 2009 This query is : Resolved
Under a construction Business, If A Builder make a Development Agreement & POA with Land Owner for certain amount for more than 10 years & treated in his book as Stock in trade. The ownership of that land is with Land Owner or with Builder? Who is liable to pay wealth tax on that land? Land is urban Land having todays market value of 35 lakhs.

Thanks in Advance.

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sanjeev murthy desai (Expert) 17 March 2009
Dear Prashanth,

Absolutely Land ownership is helding with the land Owner. And it is also depend upon development agreement, please go through the complete JDA and POA you can also find out undivided interest which are alloted to the parties.

Wealth tax is depend upon their agreement, commonly it is duty of the land owner.

sanjeev desai

M. PIRAVI PERUMAL (Expert) 17 March 2009
I agree with Mr. Sanjeev.

RAJNESH RAMESH LOMTE GULBARGA KARNATAKA (Expert) 18 March 2009
the Person doing business, for him land becomes as stock & For stock in trade there is no wealth tax.

Prashant Ramesh Surve (Querist) 18 March 2009
As per Wealth tax Act, 1957, Section 7 (Part D, Schedule III), If Urban land held as in Stock in trade for more than 10 years than Cost of the land plus 20% thereon or Market value of the land on Valuation Date whichever is higher is to be considered for calculation of Wealth tax.

Hiralal Das (Expert) 04 April 2009
I agree with the opinions of my learned members friend. You may follow them which should the proper ways to solve the problem.

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