2021 (4) TMI 1019 - AT - Wealth-tax

Wealth tax assessment - valuation of assets under the Wealth Tax Act - valuation of immovable assets and revaluation thereof - HELD THAT - The revaluation of the properties at Banjara Hills and Madhapur needs reconsideration by the AO in the light of the CBDT Circular No.3 dated 28.09.1957 above and if the value of the assets was fixed by the Assessing Officer in A.Y 2002-03 in accordance with law, then he has to adopt the same for the next two succeeding A.Ys. The Assessing Officer is directed accordingly. Further, the additional ground raised by the assessee with regard to the chargeability of Wealth Tax on Madhapur property is admitted and is also remanded to the file of the Assessing Officer for consideration in accordance with law. Assessing Officer is also directed to verify the existence of movable assets during the financial year and if they do not exist, then Assessing Officer cannot make any addition in this regard.

Summary

Issues:
Assessee's appeals for A.Ys 2003-04 & 2004-05 against CIT (A) orders dated 28.02.2017.

Analysis:
1. The case involves a search and seizure action resulting in the assessee's statement regarding movable and immovable properties subject to wealth tax. Despite notices, the assessee did not file wealth tax returns for the relevant A.Ys.
2. The AO attributed values to the assets as the returns lacked supporting documents, leading to additions of taxable wealth for A.Ys 2003-04 and 2004-05. The CIT (A) granted partial relief, prompting the assessee's second appeal to the Tribunal.
3. Grounds of appeal challenged the CIT (A)'s decisions on additions made for properties at Banjara Hills and Madhapur, movable properties, and the need for further examination by the AO.
4. The Counsel argued for maintaining values adopted in the previous A.Ys based on CBDT Circular No.3, dated 28.9.1957, and challenged the AO's increase in property values without proper justification.
5. The assessee contended that values of movable properties from earlier years were wrongly considered by the AO, urging deletion of the addition.
6. The Tribunal considered the CBDT Circular's guidelines on asset valuation and revaluation, directing the AO to reevaluate properties at Banjara Hills and Madhapur in line with the Circular. The AO was instructed to verify movable assets' existence during the relevant financial year.
7. Consequently, the appeals were remanded to the AO for reconsideration in accordance with law, ensuring the assessee's right to a fair hearing.
8. The Tribunal allowed the appeals for statistical purposes, emphasizing the importance of following legal procedures and guidelines in wealth tax assessments.