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Issues Involved:
1. Penalty under section 18(1)(c) of the Wealth Tax Act for non-disclosure of the value of guest houses. 2. Penalty under section 18(1)(c) of the Wealth Tax Act for non-disclosure of the value of residential flats allotted to employees drawing a salary of more than Rs. 5.00 lakhs per annum. Issue-wise Detailed Analysis: 1. Penalty under section 18(1)(c) of the Wealth Tax Act for non-disclosure of the value of guest houses: The assessee company filed its return of wealth, declaring the value of motor cars and claiming exemptions for certain properties, including guest houses, under section 2(ea)(1)(3) of the Wealth Tax Act. The Assessing Officer included the value of guest houses in the net wealth and initiated penalty proceedings under section 18(1)(c) for furnishing inaccurate particulars and concealing wealth. The CIT(A) cancelled the penalty, observing that the value of guest houses was duly disclosed and filed as per the auditor's certificate, relying on the decision of the Hon'ble Kerala High Court in CIT v. A. Sreenivasa Pai [2000] 242 ITR 29. Upon appeal, the Tribunal noted that the assessee had disclosed the particulars of the guest houses in the balance sheet and note-sheet filed with the return of wealth, claiming them as exempt based on a bona fide belief supported by legal precedents. The Tribunal found no concealment or furnishing of inaccurate particulars by the assessee and upheld the CIT(A)'s decision to delete the penalty on this account. 2. Penalty under section 18(1)(c) of the Wealth Tax Act for non-disclosure of the value of residential flats allotted to employees drawing a salary of more than Rs. 5.00 lakhs per annum: The assessee claimed exemption for the value of residential flats allotted to employees drawing a salary of more than Rs. 5.00 lakhs per annum under section 2(ea)(i)(3) of the Wealth Tax Act. The Assessing Officer treated this as concealment of net wealth and imposed a penalty. The CIT(A) deleted the disallowance regarding the value of the Landmark property and observed that the assessee had disclosed the value of residential flats in the note forming part of the computation of net wealth. The Tribunal, however, found that the assessee was aware of the exclusion under section 2(ea)(1) for employees drawing a salary of less than Rs. 5.00 lakhs per annum but still claimed exemption for those drawing more than Rs. 5.00 lakhs. The Tribunal held that the assessee failed to disclose the value of these residential flats in its return, thereby concealing particulars of wealth. The Tribunal directed the Assessing Officer to re-work the penalty on the value of the residential flats as per the CIT(A)'s direction in the quantum appeal and impose the minimum penalty under section 18(1)(c) of the Act. Conclusion: The appeal by the revenue was partly allowed. The Tribunal upheld the deletion of the penalty for the guest houses but reversed the CIT(A)'s decision regarding the residential flats, directing the imposition of a minimum penalty under section 18(1)(c) for non-disclosure of the value of residential flats allotted to employees drawing a salary of more than Rs. 5.00 lakhs per annum.
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