Revenue-recorded agricultural land used for agriculture is excluded from wealth tax retrospectively.

The assessees appealed under Section 27A of the Wealth-tax Act, 1957, against the Tribunal’s orders concerning assessment year 2008–09.

They claimed exemption for jointly owned lands used for agriculture. The lower authorities had denied exemption because construction was not legally impermissible on the lands

In the High Court, the assessees relied on the retrospective amendment to Section 2(ea) made by the Finance Act, 2013; the Revenue fairly accepted that submission

Agricultural use of the lands was undisputed.

Whether the lands used for agricultural purposes qualified for exemption from wealth tax under the retrospectively amended Section 2(ea) of the Wealth-tax Act

Whether the Tribunal’s orders denying exemption could stand in light of that amendment

Section 2(ea) of the Wealth-tax Act, 1957 defines the assets subject to wealth tax.

The Finance Act, 2013 inserted clause (b) in Explanation 1 to Section 2(ea), extending the relevant exclusion from “asset” to land classified as agricultural in revenue records and used for agricultural purposes. The amendment operates retrospectively from 1 April 1993

The assessments concerned assessment year 2008–09, within the retrospective operation of the amendment. Because agricultural use of the lands was undisputed, the lands fell within the amended exclusion, irrespective of the lower authorities’ reliance on whether construction was legally impermissible.

The Revenue accepted the assessees’ submission on the amendment’s effect

It stated that the assessees could seek an appropriate refund from the Department for any amounts recovered against the demands.