Madras High Court· 22 September 2026

Does exemption under Section 2(ea) of the Wealth Tax Act, 1957 apply to land used for agricultural purposes and so classified in the revenue records?

A.MOHAMED IBRAHIM v. Commissioner of Wealth Tax-I

TCA.292/2012 · 2026:MHC:3954 · TCA No. 293 of 2012
Coram: Justice Anita Sumanth · Justice S.Raveekumar

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Answer

Exemption under Section 2(ea) of the 1957 Act applies to land used for agricultural purposes and so classified in the revenue records.

Yes. Exemption under Section 2(ea) of the 1957 Act applies to land used for agricultural purposes and so classified in the revenue records. The authorities below had allowed exemption only where construction on the land was legally impermissible. Sub-clause (b), inserted into Explanation 1 by the Finance Act 2013, widened the exemption, and since agricultural activity on these lands was undisputed the assessees succeeded.

Headnote

Wealth Tax Act, 1957 — s.2(ea) — Explanation 1, sub-clause (b) — Finance Act, 2013 — Agricultural land — Retrospective effect — Wealth Tax Act, 1957 — s.2(ea) — Agricultural land — Retrospective amendment — Held: By the Finance Act 2013 amendment to Explanation 1 of Section 2(ea), given retrospective effect from 01.04.1993, exemption extends to land used for agricultural purposes and so classified in the revenue records. Appeals allowed. (¶5)

Headnote

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In the Court's own words

Paragraph 4By way of concurrent orders, the issue was decided adverse to the assessee applying the provisions of Section 2(ea) of the Act that provided for exemption only in respect of lands where construction had been held to be legally impermissible. Since the lands in question did not have the limitation as aforesaid, that is, they did not constitute lands upon which construction was impermissible, the exemption was denied.

Paragraph 5While so, the definition of ‘asset’ under Section 2(ea) was amended by insertion of sub-clause (b) to Explanation 1 thereof vide Finance Act 2013, by virtue of which, exemption from wealth tax was extended to land classified in the revenue records as agricultural land, and utilised for agricultural purposes. The amendment was given retrospective effect from 01.04.1993. In this case, the fact that the assessees have been carrying on agricultural activity on the subject lands is undisputed. The present appeals relate to AY 2008-09 and are allowed with the questions of law answered in favour of the assessee.

Acts & Sections

s.2(ea) Wealth Tax Act, 1957

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Also decided in this judgment

Does the Finance Act 2013 amendment to Explanation 1 of Section 2(ea) of the Wealth Tax Act, 1957 apply with retrospective effect from 01.04.1993?

Plain-language answer prepared by the LexStreak Editorial Desk — verify against the judgment. Source: Madras High Court. Corrections