1982 (2) TMI 137 - AT - Income Tax

Summary

Issues:
- Appeals against consolidated order of the Commissioner (Appeals) for assessment years 1965-66 to 1974-75.
- Inclusion of an amount in the computation of the assessee's net wealth based on firm's voluntary disclosure.
- Interpretation of the Voluntary Disclosure of Income and Wealth Act, 1976 regarding exemption from wealth-tax for partners of the declarant firm.

Analysis:
The Appellate Tribunal, ITAT Jabalpur, heard the revenue's appeals against a consolidated order of the Commissioner (Appeals) concerning assessment years 1965-66 to 1974-75. The case involved the inclusion of an amount in the individual assessee's net wealth based on a voluntary disclosure made by a partnership firm in which the assessee was a partner. The firm disclosed an income of Rs. 31 lakhs under the Voluntary Disclosure of Income and Wealth Act, 1976, for the account years relevant to the assessment years in question.

The Income-tax Officer (ITO) made a block assessment for the firm's voluntary disclosure, and the Income-tax Appellate Commissioner (IAC) included a portion of this amount in the individual partner's net wealth assessment. However, the IAC indicated that this inclusion would be excluded if the assessee fulfilled the conditions of the Voluntary Disclosure Scheme, 1975. The assessee appealed to the Commissioner (Appeals), raising contentions regarding the inclusion of the amount in her net wealth computation.

The Appellate Tribunal analyzed the provisions of the Voluntary Disclosure of Income and Wealth Act, specifically focusing on Section 13 and the Explanation thereto. The Explanation clarified that assets disclosed by a firm under the Act would not be considered in computing the net wealth of any partner of the firm. The Tribunal emphasized that if the firm's disclosed income included specific assets, those assets would be exempt from wealth-tax for the individual partners. Conversely, if the disclosed income did not represent any assets, there would be no basis for including the amount in the individual partner's net wealth calculation.

In conclusion, the Tribunal found no merit in the revenue's appeals, highlighting that the firm's voluntary disclosure exempted the assets from wealth-tax for the individual partners. Therefore, the Tribunal dismissed the revenue's appeals, upholding the Commissioner (Appeals) decision to exclude the impugned amount from the individual partner's net wealth computation.