9911796707
TMI Blog1985 (1) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... nder : --------------------------------------------------------------------------------------------------------------------------------------------------- Assessment year Returned Assessed After appeal Rs. Rs. Rs. --------------------------------------------------------------------------------------------------------------------------------------------------- 1967-68 3,78,890 6,87,225 5,83,000 1968-69 3,52,115 7,09,061 6,04,811 1969-70 3,17,717 7,37,383 6,31,133 1970-71 3,38,000 7,46,534 6,40,284 1971-72 4,20,000 7,72,034 3. The facts are that for all the five years, the returns of wealth had been filed on different dates starting from January 1969 to June 1971. On the basis of these returns, the WTO proceeded to pass orders on31-3-1973. Before passing these orders, the WTO initiated proceedings under section 18(1)(c). Before making of the assessment, the assessee had moved two applications---one of these applications related to the disclosure about agricultural lands and they were moved before the Commissioner, on19-2-1972and25-2-1972for non-imposition of the penalty or waiving the same. Another petition was made on26-7-1972making a disclosure about six houses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undry. The WTO had determined the value of the capital at Rs. 1,15,975. The claim of Rs. 42,210 in Deepak Iron Foundry was also rejected. The other item which is involved is the question of value of debts which according to the assessee had become bad several years prior to the valuation date and had been claimed as bad debt in the earlier years. According to the assessee, there was no value of these assets on the valuation dates. 6. The WTO, however, proceeded to hold that the assessee had concealed the particulars of his wealth and had furnished inaccurate particulars of the same. He proceeded to impose the minimum penalty in each year, which was as under : Assessment year Penalty imposed Rs. 1967-68 2,04,110 1968-69 2,52,685 1969-70 3,13,381 1970-71 3,02,000 1971-72 2,44,000 7. When the matter came up before the Commissioner (Appeals), it was contended before the Commissioner (Appeals) that regarding the large properties, the assessee had got them valued by the valuer but in respect of six small properties such valuation remained to be done. As the return was filed on the basis of the valuer's report, there was an omission regarding the value of these six pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his petition. He drew our attention to the entries in the order sheet and submitted that there were no enquiries either regarding the house properties or agricultural land. He, therefore, submitted that the behaviour of the assessee was against the charge of concealment as he disclosed the value of these properties, as soon as he realised that there had been an omission. It was also contended by him that the assessee would not conceal properties worth Rs. 14,000, when he was disclosing substantial wealth and the wealth-tax was quite nominal. It was also pointed out that the WTO has not held that there was a prior detection before the assessee moved the Commissioner in respect of this asset. 10. Regarding the agricultural land, it was submitted that it was not a case of concealment but a case of making a claim that the whole land was agricultural in nature. He pointed out that firstly, the WTO rejecting the claim of the assessee in full and after the matter was set aside, he went into the facts and accepted the claim of the assessee to substantial extent and held that only 1 bigha and 13 biswas was not qualified for being treated as agricultural land. In respect of this also, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no value of these debts and no question of their realisation as they had been outstanding since the year 1957-58. He showed to us the assessment orders in support of this claim. 13. The learned counsel submitted that from the facts, it would be clear that there was no intention to avoid any wealth-tax and if at all, it was a case of the assessee's mistakes or omissions which were not committed with the intention to defraud the revenue. He submitted that primary facts were before the WTO and wherever there were omissions it was pointed out before the department could detect it. 14. The learned counsel for the assessee then made some submissions on legal grounds and contended that the penalty orders were barred by limitation and lacked proper jurisdiction. It was submitted that the assessments made by the WTO had been set aside only on one point and, therefore, it could not be held that the latter appellate orders should be taken into consideration for working out the position of limitation. Relying on Seetharama Lakshmi Rice Groundnut Oil Mill Contractors Co. v. ITO [1978] 111 ITR 212 (AP), he submitted that the proceedings should be held to be time barred and wanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the omission to show these properties was by mistake and inadvertence and there was neither any fraud nor gross or wilful neglect in such omission. The WTO has not stated that he had himself detected this fact before the assessee brought this to the notice of the revenue authorities. 17. Regarding the agricultural land, it was pointed out that the assessee owned 10,325 square yards of land which the assessee considered to be agricultural land, the value of this, therefore, was not included in the returns filed. The WTO had, however, held that these properties were not agricultural properties and he, therefore, included the value of such properties in the wealth of the assessee. In appeal, the assessee had contended that these properties were shown as agricultural properties in the revenue records and though some part of the properties may have been shown as fallow land they were essentially agricultural in nature. The AAC in appeal, set aside the order on this issue and directed that the WTO should redetermine the nature of the properties after considering the agricultural operations, the payment of land revenue and other relevant factors. This order of the AAC setting asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there was a loss in earlier years as well as this year. Though this loss was not accepted for the income-tax purposes, it stood in the books of the assessee, instead of showing it separately the assessee adjusted it against the HUF's capital account. Apart from the above, there were certain debts which the HUF had to realise and were shown in the balance sheet for the last several years. The assessee found that these debts were outstanding for almost 20 years, and they had been claimed as bad debts in the books and reduced the capital to that extent. These adjustments in the capital accounts were not accepted by the ITO who took the same at Rs. 1,50,957 by rejecting the plea of the assessee. 21. After hearing the learned counsel for the assessee and after perusing the materials on record, we are of the view that on this question also there cannot be any charge of concealment. The balance sheets were there and all has happened in this year was the adjustment made in the capital account. No facts were concealed and they were all in the books. The revenue has not accepted the case of the assessee on the ground that the assessee had no material to establish that the withdrawals w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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