1994 (10) TMI 113 - AT - Wealth-tax

Appellate Authority, Assessing Officer, Debt Owed, High Court, Net Wealth, So Included, Valuation Date, Wealth Tax Act

Summary

Issues Involved:
1. Deduction of Rs. 25 lakhs penalty.
2. Addition of the value of 9295 kgs. of silver.
3. Addition of the value of 123 kgs. of gold.
4. Inclusion of the value of 240.040 kgs. of gold bullion.
5. Valuation of jewellery and various properties.

Issue-wise Detailed Analysis:

1. Deduction of Rs. 25 lakhs penalty:
The assessee claimed a deduction of Rs. 25 lakhs as an outstanding liability due to a penalty imposed by the Central Excise Authorities. The penalty was levied in 1966 for contravening Rule 126-L of the Defence of India Rules, 1962. The assessee had challenged the penalty in the High Court, which stayed the recovery. The Tribunal had previously rejected similar claims from the assessee for other assessment years. The assessee argued that the Tribunal's earlier decision did not consider the Supreme Court's principle in CWT v. J.K. Cotton Mfrs. Ltd. and cited a decision from the Bombay Bench of the Tribunal in Sushil Kumar Ruia v. Second WTO. The Tribunal concluded that the liability did not end merely because the recovery was stayed by the High Court and allowed the deduction.

2. Addition of the value of 9295 kgs. of silver:
During a search in 1965, 9295 kgs. of silver was found and later declared as 'Treasure' by the District Collector, Chittorgarh, and forfeited to the Government of Rajasthan. The Board of Revenue directed that silver with foreign markings (2888 kgs.) be handed over to the Central Excise Department. Both the assessee and the Central Excise Department filed writ petitions, which were pending. The CWT(A) had directed that only 50% of the value be included in the net wealth of the assessee, following a previous Tribunal order. The Tribunal, considering the High Court's decision that the assessee was the owner of the entire silver, held that the full value should be included in the net wealth.

3. Addition of the value of 123 kgs. of gold:
The assessee claimed that 123 kgs. of gold was entrusted to Ganpatlal and Hiralal, who returned only 7 gold bars. The remaining gold was never returned, and a police complaint was filed. 57 kgs. of gold was recovered and kept in the District Treasury, but the accused were acquitted. The assessee argued that the value of this gold should not be included in the net wealth. The Tribunal upheld the inclusion of 57 kgs. of gold in the net wealth but excluded the value of 66 kgs. of gold, which was never recovered and considered lost.

4. Inclusion of the value of 240.040 kgs. of gold bullion:
The gold bullion was seized and confiscated by the Central Excise Authorities in 1966. The CWT(A) deleted the addition of its value from the net wealth, as the confiscation ended the assessee's ownership. The Tribunal upheld this decision, agreeing that the assessee was no longer the owner of the confiscated gold.

5. Valuation of jewellery and various properties:
The CWT(A) had set aside the valuation of jewellery and certain properties to the Assessing Officer (A.O.) for further investigation. The Tribunal found no infirmity in this decision and upheld the CWT(A)'s order to reassess the valuation.

Separate Judgments Delivered:
The Tribunal delivered a consolidated order for all the appeals, addressing each issue comprehensively based on the facts and arguments presented. The decisions were consistent with previous Tribunal and High Court rulings, ensuring a thorough and detailed analysis of each issue involved.