9911796707
TMI Blog1988 (6) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ax assessees. The four assessees named above furnished their returns of wealth for asst. yr. 1983-84 on17th Dec., 1983before the WTO, Ward-E,Agra, who completed their assessments for that year or9th Jan., 1984. The said ITO, E-Ward, Agra also issued notices under s. 17 of the WT Act requiring these assessees to furnish their returns of income for asst. yrs. 1980-81, 1981-82 and 1982-83. No returns were, however, filed and, therefore, ex parte assessments were made against them on3rd May, 1984. All these assessment orders, however, show that the assessment orders had been typed on19th April, 1984. In these orders, the WTO further directed that notice under s. 17 be issued for asst. yrs. 1978-79 and 1979-80. Notices are said to have been issued accordingly and again no returns were filed and ex parte assessments were framed for both these years in respect of all these assessees on4th June, 1984. The WTO determined the wealth for asst. yrs. 1982-83, 1981-82 and 1980-81 by adopting the wealth assessed for asst. yr. 1983-84 as the basis and reducing therefrom the annual accretion by way of income. For asst. yrs. 1978-79 and 1979-80, however, specific properties with their values have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, establishment and supervisory staff etc. The details regarding the alleged liability has not been furnished by the firm. Even the details regarding assets are not at all verifiable with reference to income-tax records as you have not filed any balance sheet at all. The assessee firm has also failed to file statement of total assets and liabilities in its case. 3. On making a reference to your income-tax file for asst. yr. 1983-84, it has been noticed that firm, where you are a partner, was required to furnished the bifurcation of the alleged liability of Rs. 1,10,000 but the firm maintains no accounts, it is not possible for it to give the desired details. In view of this fact the so called liabilities remains unproved and the WTO should have enhanced yours share in the assets of the firm at least by Rs. 25,000. 4. You are also a partner in the firm of M/s G.S. Maggo Sons (a firm with six partners) and have declared your 1/4th shares in the assets of the firm at Rs. 2,62,825 i.e. 1/4th of total assets of the firm shown at Rs. 10.51,300 after deducting liability of Rs. 2,00,000 by estimate on account of income-tax payable, payments to labour and establishments. This liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions do not appear to be justified in the both years and, therefore, deserve to be withdrawn. 11. Similarly in asst. yr. 1984-85, the WTO has allowed deduction of Rs. 1,65,000 under s. 5(1)(xxxii) as the firm was not Industrial undertaking for the reasons stated in para 7 above. 12. From the above it is clear that the assessments, made by the WTO for the asst. yrs. 1978-79 to 1984-85 are not only erroneous but are also prejudicial to the interest of Revenue. 13. I, therefore, propose to set aside the assessment orders, passed by the WTO for the asst. yrs. 1978-79 to 1984-85. If you have any objection to the proposed course to action, you may file your written reply by29th Jan., 1986. In case, you want to make any oral submission before me personally, you may appear in my office on30th Jan., 1986at 10.30. a.m. 14. Place note that failure to avail of the opportunity for written submission and personal hearing would make you liable for an ex-parte order under s. 25(2) of the WT Act, 1957. Sd/- Commissioner of Wealth-tax,Agra" 3. The assessee filed written submissions and the CWT,Agra, passed an order dt.24th March, 1986setting aside the assessments of these assessees f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments were framed after proper enquiries and the WTO had called for the necessary details. It was also contended by him that the CWT while passing the impugned orders travelled beyond the terms of the notice issued to the assessee and, therefore, on the new points incorporated in the order, on the new points incorporated in the order, no opportunity of hearing was given to the assessee, which rendered the Commissioner s order bad. 6. The learned Departmental Representative, on the other hand, supported the Commissioner s order by pointing out that the assessments in these cases were framed in undue hurry and for asst. yrs. 1978-79 to 1982-83, the assessments were completed as soon as the term of notice under s. 17 expired without waiting for a reasonable time for the filing of the return. It was also contended that the assessees being partners in a construction firm and the firms as well as the assessees themselves being assessed to wealth-tax in another ward, it was the duty of the assessees to file their returns before the ITO, who was assessing them and that in any case, it was the duty of the WTO, E-Ward, to forward the returns to the WTO, Ward 1-D. 7. We have given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst assessment completed by the WTO in all these cases and the assessment order shows that it gives proper details of the identity and valuation of each property. In the paper books, the assessee has filed a computation chart of the total wealth of Gurcharan Singh Mago; Details of FDRs held; Computation of assessee s interest in G.S. Mago Cons; Computation of assessee s interest in G.S. Mago Sons : Copy of a letter dt.5th Jan., 1984to the ITO explaining the various things, copy of another letter dt.9th Jan., 1984to the ITO explaining certain things including the assessee s claim for exemption under s. 5(1)(xxxii) disclosing, inter alia, the rulings relied upon by the assessee. It is after these details and discussion that the WTO completed the assessments. So far as assessments for the years preceding 1983-84 are concerned, they were made by the WTO ex-parte and the basis has been the wealth assessed for 1983-84 from which annual accretions have been excluded. The WTO would not have been able to do so unless he had procured from the ITO, Ward-1/D,Agra, the income-tax records of the two firms. So far as the asst. yr. 1984-85 is concerned, the WTO framed the assessment on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of work-in-progress on the valuation date. Except payment No. 1, other payments are sufficiently after the valuation date and the income-tax assessment order of the two firms, which are before us, do not show any such asset. 11. The next ground on which the Commissioner holds the assessment orders is question to be erroneous is that liabilities claimed to be belonging to the firms have been allowed without proper ascertainment. It appears that in respect of firm M/s G.S. Mago Sons (6 partners) as against asset of Rs. 12,51,313, liabilities to the extent of Rs. 2 lakhs were claimed on account of income-tax payable, payments to labour establishments etc. In respect of the other firm, a liability of Rs. 1 lakh was claimed on the same account. These firms did not maintain any regular accounts and the liabilities are said to have been claimed on the basis of estimate. In his reply before the Commissioner, the assessee Shri Gurcharan Singh had stated that the assessee had filed details before the WTO in the shape of copies of the relevant bank account of the said firms to establish that at the close of their respective previous years there existed certain liabilities on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking. Ultimately, in his order under appeal he has not made an directions as to whether exemption under s. 5(1)(xxxii) is to be allowed or not. 13. The above discussion would show that while the reason assigned for the assessment orders being erroneous and prejudicial to the interest of the Revenue in the notice issued to the assessee were different, the reasons assigned for that opinion in the impugned order are entirely different. The Commissioner has not recorded any conclusive finding in respect of any of the various issues raised by him and, therefore, in our view, it was not established that the assessments were erroneous and prejudicial to the interests of the Revenue. Further, the impugned orders are vitiate because CWT travelled beyond the points raised in the initial notice and did not give the assessee an opportunity of explanation in respect of the new points attempted to be made out in the impugned order. 14. So far as the asst. yr. 1978-79 to 1982-83 and asst. yr. 1984-85 are concerned, the orders under s. 25(2) were passed by another Commissioner onthe 27th March, 1987, i.e. almost a year later. But in these orders no improvement was attempted upon and thes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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