1998 (9) TMI 121 - AT - Wealth-tax

Summary

Issues involved:
Appeal against deletion of penalty imposed under section 18(1)(c) of the Wealth-tax Act, 1957 for the assessment year 1978-79.

Analysis:
The appeal was directed against the deletion of a penalty of Rs. 54,000 imposed under section 18(1)(c) of the Wealth-tax Act, 1957 for the assessment year 1978-79. The assessment revealed discrepancies in the valuation of jewellery and the treatment of a loan liability. The additions to the net wealth were sustained in appeal, including enhancement in the value of jewellery and disallowance of a liability in respect of a loan taken from a bank. The assessee contended that the jewellery was valued by an approved valuer, and cited a clarification by the C.B.D.T. to support the valuation. Reference was made to a Tribunal order stating that the correct value should be determined by an expert valuer if not controverted by another valuer. However, it was revealed that the jewellery was sold for a significantly higher amount within a short period, casting doubt on the initial valuation. The Tribunal found no evidence to support the sudden increase in value and highlighted the obligation of citizens to pay taxes honestly without resorting to subterfuge.

The Tribunal emphasized the importance of factual details in each case and rejected the argument that the approved valuer's certification alone could validate the declared value. The principle of "RES IPSA LOQUITUR" was invoked, emphasizing that facts speak for themselves. The Tribunal noted that the valuation for income tax purposes did not justify the discrepancies in the wealth tax valuation. Regarding the liability claim against a fixed deposit, the assessee claimed lack of awareness of the correct legal position, but the Tribunal found this argument untenable as the assessee was represented by an eminent counsel. Ultimately, the Tribunal upheld the Assessing Officer's decision to levy the penalty for concealment of wealth, reversing the Commissioner of Wealth-tax (Appeals) order.

In conclusion, the Tribunal allowed the appeal of the Revenue, maintaining the penalty as imposed by the Assessing Officer for the concealment of wealth.