2004 (12) TMI 314 - AT - Income Tax

Income Escaping Assessment - estimation of income at 8% on main contract receipts and at 6% on sub-contract receipts - HELD THAT - Respectfully following the order of the Tribunal in the case of Shri K. Ramakrishna Contractor (P) Ltd., we are inclined to direct the Assessing Officer to estimate the income of the assessee at 8% on main contract receipts and at 5% of the sub-contract receipts, as aforesaid. This ground is allowed partly. In the result, both the appeals of the assessee are partly allowed

Summary

Issues Involved:
1. Jurisdiction of the Assessing Officer to issue notice u/s 17 of the Wealth Tax Act.
2. Reassessment proceedings initiated on mere change of opinion.
3. Additions in the net wealth of the assessee in respect of value of immovable assets.

Summary:

1. Jurisdiction of the Assessing Officer to issue notice u/s 17 of the Wealth Tax Act:
The appellant contended that the reassessment notice issued by the Joint Commissioner of Wealth Tax, Special Range-18, New Delhi, was invalid as the company had merged and ceased to exist. The Tribunal noted that the amalgamating company, Triveni Engineering & Industries Limited, merged with Gangeshwar Limited, and the new entity retained the same name. The Tribunal held that the Assessing Officer issued the notice to the amalgamated/successor company, which was properly responded to, proving that the notice was served on the amalgamated company. The Tribunal upheld the CWT(A)'s finding that the Assessing Officer had jurisdiction to issue the notice and dismissed the appeal on this issue.

2. Reassessment proceedings initiated on mere change of opinion:
The appellant argued that the reassessment was based on a mere change of opinion, as all facts were disclosed in the original return. The Tribunal found that the original return only disclosed the value of motor vehicles and did not provide details of the rented properties. The Tribunal noted that the internal audit party pointed out the factual error, and the Assessing Officer recorded reasons for reopening the assessment. The Tribunal concluded that the reassessment was not based on a change of opinion and upheld the authorities' findings, dismissing the appeal on this issue.

3. Additions in the net wealth of the assessee in respect of value of immovable assets:
The appellant claimed that the premises let out to joint venture companies were used for business purposes and should not be liable to Wealth Tax. The Tribunal noted that the joint ventures were separate entities and the premises were rented out, not occupied by the assessee for business purposes. Regarding the residential premises allotted to employees, the Tribunal upheld the CWT(A)'s finding that the exemption under section 2(ea)(i) of the Wealth Tax Act was not applicable as rent was charged from the employees. The Tribunal dismissed the appeal on this issue as well.

Conclusion:
The appeal of the assessee was dismissed on all grounds, upholding the findings of the Commissioner of Wealth Tax (Appeals).