1988 (9) TMI 111 - AT - Income Tax

Summary

Issues Involved:
1. Refusal to exclude the value of non-agricultural lands from the net wealth of the assessee.
2. Validity and scope of reassessment under Section 17 of the Wealth Tax Act.
3. Applicability of the Amnesty Scheme in reassessment proceedings.

Detailed Analysis:

1. Refusal to Exclude the Value of Non-Agricultural Lands from the Net Wealth of the Assessee:
The appellant, M/s Soundararaja Mills Ltd., filed returns for the assessment years 1984-85 and 1985-86, including the value of 21.22 acres of non-agricultural lands at Balakrishnapuram amounting to Rs. 1,23,460 in its net wealth. The original assessments were completed on 28th July 1986, accepting the net wealth declared by the appellant. Subsequently, the appellant filed revised returns under the Amnesty Scheme, claiming that the value of the non-agricultural lands was erroneously included and should be excluded. The IAC, however, issued notices under Section 17 of the WT Act and refused to exclude the value of the lands, leading to reassessment orders on 14th Oct 1986, which included the value of the lands.

2. Validity and Scope of Reassessment under Section 17 of the Wealth Tax Act:
The CIT(A) upheld the IAC's decision, stating that the original assessments had become final, and the appellant could not re-agitate matters concluded in the original assessment during reassessment under Section 17. The CIT(A) relied on the Kerala High Court's decision in CWT vs. C. Ravindaran & Ors., which held that the jurisdiction to reassess is limited and does not allow for recomputation of net wealth or claims not made during the original assessment.

The Tribunal agreed with the CIT(A), citing the Madras High Court's decision in Chettinad Corporation P. Ltd. vs. CIT, which held that reassessment proceedings could not be used to re-agitate issues already decided in the original assessment. The Tribunal distinguished this case from the decisions in CIT vs. Standard Motor Products (India) Ltd. and CIT vs. B. Nagi Reddi, which dealt with the inclusion of escaped income rather than the exclusion of assets already assessed.

3. Applicability of the Amnesty Scheme in Reassessment Proceedings:
The appellant argued that the revised returns filed under the Amnesty Scheme should be accepted without further inquiry, as per the circulars and directions of the CBDT. However, the Tribunal rejected this argument, stating that the assessing authority is not bound to accept revised returns under the Amnesty Scheme without verifying the correctness of the claims. The Tribunal held that the proposition put forward by the appellant was too broad and unsupported by any authority.

Conclusion:
The Tribunal confirmed the orders of the CIT(A), holding that the appellant could not claim the exclusion of the value of non-agricultural lands in the reassessment proceedings under Section 17 of the WT Act. The appeals were dismissed, and the reassessment orders including the value of the lands were upheld. The Tribunal also noted that it was unnecessary to express an opinion on the alternative contention regarding further inquiry into the nature of the land.