The Judgment of the Court was delivered by

R. Gururajan, J.:— The Revenue is before us raising the following questions of law:

“(a) Whether the Tribunal was correct in holding that the value of properties held by the assessee at Adugodi and Koramangala is not chargeable to wealth-tax as the same are not urban land but land with superstructure and cannot form part of the wealth as defined under section 2(ea) of the Act?

(b) Whether the properties of the assessee cannot be brought to wealth-tax assessments?”

2. The facts of the case are as under:

The assessee is assessed in the status of Hindu undivided family. During the assessment year 2000-01, the assessee owned a property at Sy. Nos. 67/2, 67/3, 67/4 and 67/5 at Adugodi Village and portion of Sy. No. 151 at Koramangala Village of Begur Hobli of Bangalore South Taluk. This property was given to M/s. Prestige Estates Properties (P) Ltd., Bangalore, under various agreements for construction of residential flats. The development agreement was considered by the Assessing Officer in the course of assessment proceedings. The assessee claimed that it had retained ownership of the land until flats are fully constructed and possession of the assessee's share was handed over to it. The development agreement constituted only permissive possession according to the assessee for the limited purpose of construction of flats. The assessee contended that the assessee continues to be the owner of the land for the financial year 1995-96 and subsequent years till the sale of flats. Notice under section 17 of the Act was issued to the assessee and he filed return of wealth of Rs. 8,48,000 on August 20, 2003. After considering the contention of the assessee, the Assessing Officer proceeded to treat the property as urban land and brought it to tax under an order dated March 31, 2005. An appeal was filed before the Assistant Commissioner of Wealth-tax (Appeals), Bangalore. The appeal stood allowed in the light of an earlier order of the Tribunal. The Revenue thereafter filed an appeal to the Tribunal. The Tribunal following its decision in W.T.A Nos. 4-5.Bang/2003, dated March 22, 2004 dismissed the appeal filed by the Revenue. It is in these circumstances, the Revenue is before us raising the above referred questions of law.

3. Sri Seshachala, learned counsel for the Department, would take us through section 2(e), the definitions of “urban land” and “net wealth” under the Wealth-tax Act in the case on hand. He would say that a careful reading of the provisions would show that the contentions of the assessee before the authorities are unsustainable in law. He would also say that the order in W.T.A Nos. 4-5.Bang/2003 is contrary to the legal provisions and even otherwise, the said order is not applicable to the facts of this case. Per contra, Sri Parthasarathi and Sri Shankar, learned counsel, would contend that the land offered for joint development on which a building was being constructed does not fall under the definition of an “asset”/“urban land” and that therefore the Tribunal was justified in accepting the submission of the assessee. After hearing, we have carefully perused the material on record.

4. The Assessing Officer in his order would hold that the assessee being owner of the vacant land is liable to wealth-tax in terms of the provisions governing such assessment. The same was challenged in appeal, the appellate authority accepted the case of the assessee. When the same was challenged before the Tribunal, the Tribunal noticing the view expressed by it in an earlier case in W.T.A Nos. 4-5.Bang/2003, held that the land offered in joint development does not fall under the definition of an asset under section 2(ea) of the Act and that therefore no wealth-tax can be claimed or leviable by the Department.

5. We have to see as to whether the vacant land owned by the land owner is exempt for the purpose of wealth-tax proceedings.

6. Section 2(ea) would define the term “asset” and “urban land” has been defined in section 2(ea), Explanation 1(b). The said definition reads as under:

“‘Urban land’ means land situate—

(i) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which relevant figures have been published before the valuation date; or

(ii) in any area within such distance, not being more than eight kilometres from the local limits of any municipality or cantonment board referred to in sub-clause (i), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette,

but does not include land on which construction of a building is not permissible under any law for the time being in force in the area in which such land is situated or the land occupied by any building which has been constructed with the approval of the appropriate authority or any unused land held by the assessee for industrial purposes for a period of two years from the date of its acquisition by him or any land held by the assessee as stock-in-trade for a period of ten years from the date of its acquisition by him.”

7. The said definition of urban land would show that certain lands are not includible for the purpose of “urban land”. We are concerned in the case on hand with regard to “the lands occupied by any building which has been constructed with the approval of the appropriate authority”. Approval by appropriate authority is not disputed. What is argued before us is that since the building is being constructed, the same is exempt for the purpose of wealth-tax in terms of the meaning to be given to urban land. A careful reading of the said definition would show that what is excluded is the land occupied by any building which has been constructed (underlining1. is ours). Admittedly, in the case on hand, the building is not fully constructed. It is in the process of construction. Building in the process of construction cannot be understood as a building which has been constructed as sought to be argued before us. The courts have to interpret any definition in a reasonable manner for the purpose of fulfilling the object of the Act. The courts cannot interpret a term in such an unreasonable manner making thereby unworkable of the Act as sought to be argued before us. Constructed has its own meaning. Constructed would mean “fully constructed” as understood in the common parlance. The Tribunal unfortunately, without noticing the intention of the Legislature and the specific wording in the section has chosen to blindly follow its earlier order. If the order of the Tribunal is accepted then neither the owner nor the builder nor the occupant would pay any tax to the Government in terms of the Wealth-tax Act. In these circumstances, we are unable to accept that argument advanced by the learned counsel for the respondent. On the other hand, we would accept the reasonable argument of the learned counsel for the Department in the matter of the proper understanding of the words “land occupied by any building which has been constructed”, since that would fulfil the intention of the Legislature.

8. In fact, we have been provided with the order of the Tribunal passed on an earlier occasion, on which reliance is placed by the Tribunal. We have also gone through the order in W.T.A No. 4 of 2003. A reading of the said order would show that the Tribunal seems to have not properly considered the word “constructed” in the said order. The Tribunal seems to have been swayed away by the theory of openness of the land for the purpose of taxation. The Tribunal has failed to notice the principle that each word in taxing statute has its own significance for the purpose of taxation. The words, “land on which the building is constructed” have not been properly appreciated/considered by the Tribunal. The said order cannot be a bar for the Department to seek tax in respect of the land on which building is constructed in terms of the defence.

9. Sri Parthasarathy, learned counsel, would place before us the Law Lexicon in the matter of meaning of the word “building”. We have noticed the various definitions in terms of the case law as referred to us. The interpretation of any word would depend upon the wording in a particular statute and the object of the Act as understood in law. Therefore, we are not prepared to blindly accept the contention of the assessee on the basis of the meaning given to building in terms of the Law Lexicon. However, the wording in the case on hand would support the Department and those words “building constructed” would make all the difference for the purpose of interpretation. At this stage, we must notice a recent Bench judgment of this court in W.T.A No. 7 of 2003 carried with 8 of 2003 (since reported in Vysya Bank Ltd. v. Deputy CWT (Assessment), [2008] 299 ITR 335 (Karn)). The facts as narrated by the Division Bench in that case would show that the assessee Vysya Bank had entered into an agreement for purchase of property on June 17, 1978. The assessee was put in possession of the property. Proceedings were initiated by the State Government. Thereafter, assessment proceedings were initiated by the assessee. The Assessing Officer ruled that the assessee has become the owner of the property for the purpose of taxation. Appeals were filed before the appellate authority. Appeals were allowed and the findings were reversed. The Revenue took up the matter before the Tribunal. The Tribunal ruled in favour of the Revenue. On a further appeal by the assessee to this court, this court noticed the terminology “assets” and also the meaning of the words “urban land” in its order. The Division Bench also noticed section 4(8) of the Act and also the judgment of the apex court in CWT v. Bishwanath Chatterjee, [1976] 103 ITR 536 and ultimately ruled that the assessing authority was not justified in including the vacant land in the net wealth of the assessee for the purpose of computation of wealth as on the valuation date for the purpose of the Wealth-tax Act. The said judgment to a certain extent would support the Revenue.

10. We must also refer to the judgment of the Orissa High Court and the judgment of the Supreme Court as referred to by Sri Parthasarathi, learned counsel. CWT v. K.B Pradhan, [1981] 130 ITR 393 (Orissa) is a case in which the court was considering the word “house” for the purpose of the Wealth-tax Act. The said case is of no assistance to the assessee since in the said case, the court was considering only the word “house” and not building construction as in the present case. Even otherwise, it is seen from the said case, the court was considering as to the house being habitable or not, as we see from the order itself. That judgment is of no assistance to the assessee.

11. State of Bombay v. Sardar Venkat Rao Krishna Rao Gujar, AIR 1966 SC 991 is a case dealing with Madhya Pradesh Abolition of Proprietary Rights Act. The apex court in paragraph 11 noticed as to whether “ottas” and “chabutras” can be regarded as buildings. The court ruled that the word “buildings” should therefore be given its literal meaning as something, which is built. Sri Bindra, learned counsel, in the said case contended that for a structure to be regarded as building it should have walls and a roof and in support of this contention he relied upon the decision in Moir v. Williams, [1892] 1 QB 264. In that case, Lord Esher has observed that the term “generally” means all enclosures of brick and stone covered by a roof. But, he has also made it clear that the meaning to be given to that word must depend upon the enactment in which the word is used and the context in which it is used. The Supreme Court ultimately ruled that these observations must be considered in the context of the Act which was being construed and in the context in which they were made. That case is also of no assistance to the assessee in the light of clear words available in the case on hand. This court cannot forget that Parliament in its wisdom has chosen to provide an exemption only under certain circumstances. The court cannot extend the exemption without any legal compulsion in terms of the Act Since in our view, the wording that the urban land would mean a land on which complete building stands, such lands alone would qualify for exemption. That conclusion is inevitable and we accept the appeal of the Revenue.

12. In these circumstances, this appeal is accepted. The questions of law are answered in favour of the Revenue. No costs.