2015 (2) TMI 258 - AT - Wealth-tax

Penalty u/s 18(1)(c) of the Wealth Tax Act, 1957 - concealment of value of property - Held that - the fact that the value declared by the assessee of its Mumbai property was accepted by the AO in the assessments originally completed u/s 16(3) read with section 17 of the Act, again goes to show that the method adopted by the assessee to value its Mumbai property was a plausible one and although the same turned out to be a mistaken one, the facts and circumstances of the case show that the claim of the assessee was bonafide. In our opinion, the mistake on the part of the assessee in declaring the value of its Mumbai property for wealth tax purpose, thus, cannot be equated with concealment of particulars of its assets by the assessee or furnishing of inaccurate particulars of such assets so as to attract penalty u/s 18(1)(c) of the W.T. Act. assessee or furnishing of inaccurate particulars of such assets so as to attract penalty u/s 18(1)(c) of the W.T. Act. - Decided in favor of assessee. Penalty for not disclosing the value of motor cars - Held that - It is also pertinent to note here that even in response to notices issued by the AO for the second time u/s 17, the assessee did not disclose the value of motor cars by filing fresh returns of income and instead filed a letter stating that returns of wealth already filed by it may be treated as returns filed in response to the said notices. As such, considering all the facts of the case and the conduct of the assessee, we are of the view that the non-disclosure of the value of motor cars in the returns of wealth for both the years under consideration, clearly amounts to concealment of particulars of its assets by the assessee attracting penalty u/s 18(1)(c) of the Act. - penalty imposed by the AO u/s 18(1)(c) is sustained only to the extent it is in respect of addition made to the wealth of the assessee for both the years under consideration on account of value of motor cars. - Decided against the assessee.

Summary

Issues:
Penalty under section 18(1)(c) of the Wealth Tax Act, 1957 for AYs 1997-98 and 1998-99.

Analysis:
1. The appeals were filed against the penalties imposed by the AO under section 18(1)(c) of the Wealth Tax Act, 1957 for AYs 1997-98 and 1998-99, confirmed by the CIT(A) for not filing wealth tax returns on time.
2. The AO found the assessee, a domestic company, owned commercial property and motor vehicles chargeable to wealth tax, but the value of cars was not included in net wealth calculations.
3. The AO added the value of cars and revalued the commercial property, increasing the net wealth significantly, leading to penalties for alleged suppression of wealth.
4. The assessee argued the valuation of the commercial property was based on a bonafide mistake, as cost of acquisition was disclosed, and the value was accepted in previous assessments.
5. The AO imposed penalties citing clear provisions of the Act regarding valuation and non-disclosure of assets, upheld by the CIT(A) for both years.
6. The Tribunal considered the submissions, noting the assessee's bonafide mistake in valuing the property, but found intentional concealment in not disclosing the value of motor cars.
7. The Tribunal partially allowed the appeals, sustaining penalties only for the non-disclosure of the value of motor cars, modifying the CIT(A)'s order.

This detailed analysis highlights the issues, arguments, and decisions made regarding the penalties imposed under section 18(1)(c) of the Wealth Tax Act, 1957 for the relevant assessment years.