1995 (3) TMI 166 - AT - Wealth-tax

Summary

Issues Involved:
1. Valuation of 9295 kgs. of silver bullion.
2. Valuation of 57 kgs. of gold.
3. Deduction of Rs. 25 lacs penalty imposed by the Collector, Central Excise.

Issue-wise Detailed Analysis:

1. Valuation of 9295 kgs. of Silver Bullion:
The first issue concerns the valuation of 9295 kgs. of silver bullion, which the assessee declared as 'nil'. The AO included the entire value in the net wealth of the assessee. The CWT(A) directed the AO to adopt 25% of the total value. Both the assessee and the Revenue appealed this decision. The silver was discovered during a search by Central Excise authorities in 1965 and was declared 'Treasure' under the Indian Treasure Trove Act, 1878, and forfeited to the Government of Rajasthan. Subsequent appeals and writ petitions were filed, and the High Court eventually recognized the assessee as the owner of the silver in 1992. The Tribunal, in its previous orders, held that the entire value of the silver should be included in the net wealth of the assessee. The assessee argued for a discounted value due to the pending status of the silver with the Customs Department. However, the Tribunal found the Revenue's argument compelling and upheld the inclusion of the entire value in the net wealth, rejecting the assessee's appeal.

2. Valuation of 57 kgs. of Gold:
The second issue pertains to the valuation of 57 kgs. of gold included in the net wealth of the assessee. The gold was found during raids in 1965 and was later discovered buried at the residence of Ganpatlal, who was entrusted with the gold by the assessee. After a trial, Ganpatlal and others were acquitted, and the gold was not returned to the assessee. The assessee claimed that the gold should not be included in the net wealth as it was not in their possession and had foreign markings, making it a prohibited article. The Tribunal, referencing its previous decision, upheld the inclusion of the gold's value in the net wealth, rejecting the assessee's contention.

3. Deduction of Rs. 25 lacs Penalty:
The third issue involves the deduction of a Rs. 25 lacs penalty imposed by the Collector of Central Excise for contravening the Defence of India Rules, 1962. The penalty was not paid, and its recovery was stayed. The Tribunal had previously accepted the deduction, but the penalty was later quashed by the Collector. The Tribunal, considering the penalty was never paid and was quashed, upheld the CIT(A)'s decision to disallow the deduction.

Revenue's Appeals:
The Revenue's first appeal objected to the CWT(A)'s direction to include only 25% of the silver's value in the net wealth. The Tribunal reversed the CWT(A)'s order, restoring the AO's decision to include the entire value. The second objection concerned the inclusion of only 57 kgs. of gold in the net wealth, with the Revenue contending that 66 kgs. should also be included. The Tribunal found no merit in this ground, referencing its previous decision to exclude the 66 kgs. of gold from the net wealth.

Conclusion:
The appeals by the assessee were dismissed, and the appeals by the Revenue were partly allowed.