1982 (3) TMI 151 - AT - Wealth-tax

Summary

Issues:
Stay application for demand amounting to Rs. 2,57,757 for the assessment years 1973-74 to 1975-76, settlement with the CIT for the assessment year 1967-68, inclusion of undisclosed wealth in net wealth for assessment years 1973-74 to 1975-76, penalties imposed under section 18(1)(c) of the Wealth Tax Act for concealment of wealth, consideration of liability admissibility in computing net wealth, difference of opinion between Tribunal members on penalty exigibility, pending miscellaneous application for stay of demand.

Analysis:
The judgment pertains to a stay application by the assessee requesting the demand of Rs. 2,57,757 for the assessment years 1973-74 to 1975-76 to be stayed. It was noted that the assessee had already deposited Rs. 50,000, leaving a balance of Rs. 2,07,757. The assessee had previously settled with the CIT for the assessment year 1967-68, surrendering an amount of Rs. 85,919 to be taxed under the Income Tax Act. However, this settlement did not cover the assessment years 1973-74 to 1975-76. The Wealth Tax Officer (WTO) sought to include the undisclosed wealth of Rs. 85,919 in the net wealth of the assessee for these three assessment years, which was disputed by the assessee. The Tribunal, in quantum appeals, allowed the liabilities claimed by the assessee, resulting in negative wealth for two years and negligible wealth for the third year.

Another issue addressed in the judgment was the penalties imposed under section 18(1)(c) of the Wealth Tax Act for concealment of wealth. The penalties imposed by the WTO were upheld by the CIT (Appeals), and the Tribunal, in the absence of reasoning from quantum appeals, considered the admissibility of liabilities in computing net wealth. The Tribunal upheld the penalties, leading to a miscellaneous application by the assessee requesting a review based on the quantum appeal orders. This application resulted in a difference of opinion between the Tribunal members, leading to a reference to the Hon'ble president, ITAT for resolution.

The judgment concluded by partially allowing the stay application. The demand of Rs. 85,919 for the assessment year 1975-76 was stayed pending the decision of the third member, while the remaining demand of Rs. 1,21,838 for the assessment years 1973-74 and 1974-75 was to be paid by the assessee. Adequate securities were to be furnished for the stayed demand, and failure to pay the remaining demand by a specified date would automatically vacate the stay. The decision to grant the stay was based on the peculiar circumstances of the case, and it was emphasized that this ruling would not set a precedent.