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Issues Involved:
1. Levy of penalty under section 18(1)(c) of the Wealth-tax Act for disclosure of low value of jewellery in returns. 2. Applicability of Explanation 4 to section 18(1)(c) of the Wealth-tax Act. Detailed Analysis: 1. Levy of Penalty Under Section 18(1)(c) of the Wealth-tax Act: The assessees objected to the levy of penalty under section 18(1)(c) for disclosing low value of jewellery in their returns. The particulars of wealth assessed, value of jewellery shown, and assessed in the three cases were as follows: - Pradeep Kumar Anand: Wealth - Rs. 2,73,890, Jewellery shown - Rs. 1,20,000, Jewellery assessed - Rs. 2,23,390. - Smt. Shiela Rani Anand: Wealth - Rs. 19,57,098, Jewellery shown - Rs. 1,80,000, Jewellery assessed - Rs. 3,00,000. - C.L. Anand, HUF: Wealth - Rs. 26,96,307, Jewellery shown - Rs. 1,04,039, Jewellery assessed - Rs. 1,88,495. The assessees claimed the value of jewellery was based on the preceding assessment year, as per CBDT instructions. They voluntarily furnished the report of a registered valuer before any discrepancy was detected. The assessing officer, however, initiated penalty proceedings due to the difference in the disclosed and assessed value of jewellery and shares, concluding that the assessees concealed particulars of wealth. 2. Applicability of Explanation 4 to Section 18(1)(c) of the Wealth-tax Act: The learned CWT(A) accepted that no penalty was leviable on the difference in the value of unquoted shares returned and assessed, acknowledging it as a bona fide difference. However, he levied penalties for the low value of jewellery shown, holding that the difference amounted to concealing particulars of wealth. The CWT(A) relied on Explanation 4 to section 18(1)(c), which states: "Where the value of any asset returned by any person is less than seventy per cent of the value of such asset as determined in an assessment under section 16 or section 17, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of clause (c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value." The Appellate Tribunal examined whether Explanation 4 was applicable. The Tribunal noted that the Explanation shifts the onus to the assessee to prove that the returned value of the asset is correct, even if the assessed value has become final. The Tribunal distinguished between "estimated" and "determined" values, noting that "determined" implies a fixed calculation based on definite data, while "estimated" involves approximation and guesswork. The Tribunal concluded that penalty under section 18(1)(c) cannot be levied merely because the value returned is less than 30% of the assessed value if the value is taken on an estimate basis. The Explanation applies only when the value is determined as per statutory provisions. In the present case, the jewellery value was returned and assessed on an estimate basis, and the valuation report was an opinion of an expert, not a precise determination. Therefore, the assessees were not subject to Explanation 4, and the penalties were canceled. The Tribunal also noted that the CWT(A) had canceled the penalty on the difference in the value of shares, which was accepted by both parties, further supporting the view that the value was estimated, not determined. Conclusion: The Tribunal allowed the appeals of all three assessees, canceling the penalties levied under section 18(1)(c) for the low value of jewellery shown in the returns. The Tribunal held that Explanation 4 to section 18(1)(c) was not applicable as the value of jewellery was estimated, not determined, and the penalties were unsustainable.
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