2012 (9) TMI 529 - AT - Wealth-tax

Reassessment of taxable wealth - notice u/s. 16(5) r.w.s. 17 - Held that - As the notices under section 17 were issued to the assessee in all the 3 assessment years directing it to file the returns of wealth which were not filed by the assessee & thereafter notices were issued to assessee directing it to submit the details of wealth again there was no compliance contravening the provisions of Sec. 16(5). Hence there was no infirmity on the part of W.T.O. in making the assessment by invoking the provisions of section 16(5) r.w.s. 17 of the W.T. Act - against assessee. Whether the vehicles were used for hiring of the vehicles or for any other purpose - determination of taxable wealth in the years under consideration - Held that - Since the facts and circumstances of the case in the present appeals are identical to that of A.Y. 1999-2000, the decision of coordinate Bench of previous year is followed and remit matter back to the file of WTO to examine the lease agreements and arrive at a conclusion as to whether the recipients of the vehicles had hired out the vehicles as stipulated under W.T. Act and pass appropriate orders on merits after giving reasonable opportunity of hearing to the assessee. The assessee shall submit all the information required by WTO to determine the taxable wealth - in favour of assessee for statistical purposes.

Summary

Issues:
- Notice u/s. 16(5) r.w.s.17 of the W.T. Act and reassessment of taxable wealth.

Analysis:
1. The appeals were filed against the order of CWT (A)-XIV, Ahmedabad for the Assessment Years 2001-02, 2002-03, and 2003-04. The CWT (A) passed a combined order for all three years due to identical assessment orders. The main issue raised in the appeals was regarding the issuance of notice u/s. 16(5) r.w.s.17 of the W.T. Act and the reassessment of taxable wealth.

2. The WTO finalized the assessment u/s 16(5) r.w.s.17 of the W.T. Act based on the non-compliance of the assessee in filing returns of wealth and providing necessary details. The assessee was engaged in the business of leasing and trading in shares, and the WTO determined the net wealth for each assessment year based on the company's assets. The CWT (A) upheld the assessment, stating that the motor cars owned by the assessee were subject to Wealth tax as per Sec. 2(ea) of the W.T. Act.

3. The AR argued that there was no escapement of taxable wealth and that the vehicles were used for leasing, earning lease rentals and hire charges. Referring to a previous ITAT decision for A.Y. 1999-2000, the AR requested the matter to be remitted to the WTO for further examination based on similar facts. The DR did not object to this suggestion, indicating a willingness to reexamine the matter.

4. The ITAT upheld the assessment made by the WTO under section 16(5) r.w.s. 17 of the W.T. Act due to the assessee's failure to file returns of wealth and comply with notices. The ITAT found no infirmity in the assessment process based on the available material. The issue of determining taxable wealth was addressed by referring to a previous ITAT decision for A.Y. 1999-2000, where the matter was remitted back to the WTO for further examination of lease agreements and usage of vehicles for hiring.

5. Given the identical nature of the facts and circumstances in the present appeals to those of A.Y. 1999-2000, the ITAT followed the decision of the coordinate Bench and remitted the matter back to the WTO to examine lease agreements and determine if the vehicles were hired out as per the provisions of the W.T. Act. The assessee was directed to provide all necessary information for the determination of taxable wealth. As a result, the appeals of the assessee were allowed for statistical purposes.