2018 (6) TMI 1333 - AT - Wealth-tax

Lamborghini Car for computation of wealth tax liability - ownership of the Lamborghini car was not with the assessee, therefore, the assessee was not entitled to any depreciation thereon - Held that - CWT (Appeals) has also noted that the assessee s appeal before the ITAT was decided in assessee s favour. Thus, there appears to be a contradiction in the finding recorded by the Ld. CWT (A). The Ld. AR also could not shed any light on the issue. This aforementioned order of the ITAT has not been placed before us by either of the parties and nor have any supporting documents been filed by the assessee so as to enable us to appreciate the issue in right perspective. Although we are inclined to dismiss the appeal of the assessee for want of active participation in the appellate proceedings before us, in the interest of justice, we deem it fit to restore the file to the office of the Ld. CWT (A) to be adjudicated de novo after giving due opportunity to the assessee to present its case

Summary

Issues:
- Disallowance of depreciation on a Lamborghini car for wealth tax assessment.
- Contradictory findings by the Ld. Commissioner of Wealth Tax (Appeals).
- Lack of clarity in the assessment leading to restoration of the case for de novo adjudication.

Analysis:
1. Disallowance of Depreciation: The appeal was filed against the order of the Ld. Commissioner of Wealth Tax (Appeals) concerning the wealth tax assessment for the year 2008-09. The Assessing Officer had valued a Lamborghini car at a higher amount than declared by the assessee, resulting in disallowance of depreciation and addition to the net wealth. The Ld. CWT (A) upheld this decision based on a previous ITAT Delhi Bench ruling that the assessee was not the owner of the car, hence not entitled to depreciation. The Ld. AR argued against this disallowance, but failed to provide supporting evidence or legal precedents.

2. Contradictory Findings: The ITAT noted a contradiction in the Ld. CWT (A)'s findings as the order referenced the ITAT Delhi decision stating the assessee was not the owner of the Lamborghini car, while also mentioning a favorable outcome for the assessee in a previous appeal. This lack of clarity in the assessment led to confusion regarding the ownership and entitlement to depreciation. The Ld. AR could not clarify this issue, and the relevant ITAT order was not presented during the appeal.

3. Restoration for De Novo Adjudication: Despite considering dismissal due to the assessee's lack of active participation, the ITAT deemed it necessary in the interest of justice to restore the case to the Ld. CWT (A) for fresh adjudication. The assessee was directed to represent itself before the Ld. CWT (A) for a fair opportunity to present its case. Failure to comply would result in the Ld. CWT (A) proceeding ex parte. Ultimately, the appeal was allowed for statistical purposes, and the case was restored for further proceedings.

In conclusion, the judgment highlighted issues related to the disallowance of depreciation on a Lamborghini car for wealth tax assessment, contradictory findings by the Ld. Commissioner of Wealth Tax (Appeals), and the lack of clarity leading to the restoration of the case for de novo adjudication to ensure a fair opportunity for the assessee to present its case effectively.