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Issues:
Interpretation of Wealth-tax Act vs. Income-tax Act for reference under section 27(1), Valuation of jewellery under Voluntary Disclosure Scheme, Bona fide error in valuation, Immunity from penalty under Voluntary Disclosure Scheme, Dispute over valuation in assessment proceedings, Authority of Wealth-tax Officer in valuation determination. Analysis: The judgment pertains to a reference under section 27(1) of the Wealth-tax Act, 1957, regarding the valuation of jewellery under the Voluntary Disclosure Scheme for the assessment year 1973-74. The primary issue revolves around the discrepancy in the valuation of jewellery declared by the assessee under the scheme and the subsequent valuation based on a valuer's report during assessment proceedings. The Wealth-tax Officer rejected the revised valuation and upheld the initial valuation disclosed under the scheme. The Appellate Assistant Commissioner and the Tribunal differed in their opinions regarding the validity of the revised valuation. The Tribunal emphasized that if the assessee could prove a lower value for the jewellery without dispute, it could be considered in the assessment. However, the Tribunal's decision was contested by the Revenue, arguing that the declaration under the scheme should be binding, and any attempt to lower the valuation post-declaration would defeat the scheme's purpose. The Tribunal's direction to reevaluate the jewellery based on the valuer's report was deemed erroneous by the High Court. The Court emphasized that the declaration made under the Voluntary Disclosure Scheme was binding, and any attempt to alter the valuation post-declaration would undermine the scheme's integrity. The Court highlighted that the purpose of the scheme was to encourage voluntary disclosure by granting immunity from penalties, and any subsequent attempt to reduce the valuation for tax benefits would defeat this purpose. The Court reiterated that the Wealth-tax Officer had the authority to consider the declaration for assessment purposes and could initiate proceedings if discrepancies were found. The Court rejected the assessee's argument that the valuer's report justified a lower valuation, emphasizing that the valuation declared under the scheme should be upheld. The Court noted that the information provided in the declaration was verified and solemnly affirmed by the assessee, making it legally binding. The Court concluded that the Tribunal erred in directing a fresh valuation based on the valuer's report and upheld the value declared under the scheme. The Court ruled in favor of the Revenue, emphasizing the binding nature of the declaration under the Voluntary Disclosure Scheme and denying any scope for post-declaration valuation adjustments. In conclusion, the High Court's judgment clarified the binding nature of declarations made under the Voluntary Disclosure Scheme, emphasizing the integrity of the scheme and the authority of the Wealth-tax Officer in valuation determinations. The Court upheld the initial valuation declared by the assessee under the scheme, rejecting attempts to alter the valuation post-declaration for tax benefits. The judgment serves as a precedent for upholding the sanctity of declarations under such schemes and discouraging attempts to manipulate valuations for tax advantages.
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