9911796707
TMI Blog2006 (10) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... harpura, Surat. Since under consideration it is shown as per balance sheet Land Rs. 5,53 , 162 Construction Rs. 16,95,591 Rs. 22,49,753 Later on assessee found that the said property being stock-in-trade was not coming within the purview of definition of asset as given in section 2( ea ) of Wealth-tax Act, 1957. Accordingly the assessee filed application under section 35 of the Wealth-tax Act for the years under consideration claiming therein that the said property was not an "asset" within the meaning of section 2( ea ) of the Act and thus there was a mistake in the computation of net wealth by the assessee which is required to be rectified under the provisions of section 35 of the Act. The application filed by the assessee was rejected with the following observations : "In this case, the assessee filed a Wealth-tax return for assessment year 1993-94 showing total wealth of Rs. 29,26,675. Subsequently, the assessee filed application dated 19-7-1997 and 11-12-2004 under section 35 of the Wealth-tax Act stating that the value of a property at Pipla Sheri Mahidharpura, Surat amounting to Rs. 22,48,753 was wrongly included in the list of taxabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder consideration. The contention of the appellant that any house for residential or commercial purposes was exempt under section 2( ea ) with effect from 1-4-1993 is thus not found to be correct in accordance with the provisions of the law. On perusal of the relevant assessment records, it is further seen that there is no mention in the returns or in the computation of wealth or in the balance sheets of M/s. Krishna Organizers as to whether the said property, held as the appellant s stock-in-trade, was for residential purposes or not. The claim of the appellant that the said property was exempt under section 2( ea ) as it stood at the relevant point of time, is thus not apparent from the records. The contention of the appellant that his aforesaid claim for exemption was rectifiable under section 35 of the Act inasmuch as the same was apparent from the records is, therefore, not found to be correct as the facts in regard to the said property being for residential or for commercial purposes are not apparent from the facts available on the records or from the details filed by the appellant with his returns of wealth. In the above facts of the case, the mistake, as contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer and CIT(A). He pleaded that there was no apparent mistake from record as the assessment was made according to the return filed by the assessee and the latter claim of the assessee cannot be accepted being inconsistent with the computation of wealth. Thus it was pleaded that order of CIT(A) should be upheld. 7. We have carefully considered the rival submissions in the light of material placed before us. It is the policy of the Department that its officer should not take advantage of ignorance of an assessee as to his rights and it is one of the duties of the officers of the Department to assess the taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard, the officers should take initiative in guiding the taxpayers wherever proceedings or other opportunities indicate that some refund or relief is due to him. This attitude, according to the Revenue Department would in the long run benefit the Department as the same will inspire confidence in the assessee that he may be sure of getting a square deal from the Department. This policy has been envisaged in Circular No. 14 (XL-35] of 1955 dated 11-4-1955. Referrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of the original assessment, the assessee would be entitled to relief under section 80J and in view of this circular, it was obligatory on the part of the ITO to draw the attention of the assessee to the relief under section 80J." [Emphasis, italicised in print, ours] Thus there cannot be any dispute to the proposition that if the basis and relevant material is on record to claim/support the exemption/deduction, it is the duty of Assessing Officer to guide the assessee to enable him to claim such deduction/exemption and if it is not so granted assessee will be entitled to get it by way of rectification. 8. Relying on the above decision of Hon ble Gujarat High Court, Hon ble Madhya Pradesh High Court in the case of K.N. Oil Industries ( supra ) accepted such proposition that in a case where basic facts/material is available on record to support the claim, the same could be accepted by way of rectification. It will be relevant to reproduce following observations from the said decision : "On the facts and circumstances of the case, though the assessee had not claimed relief under section 35B of the Income-tax Act in the original assessment proceedings, if it is appare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief could not be apparent and could not be corrected under section 154. These cases which were decided by the Allahabad High Court do support the submission of the learned counsel. But, with great respect, we are unable to agree with the view taken in them. The record of the assessment is not confined to the return. Section 154 which confers jurisdiction for rectifying mistake enables the ITO to assume jurisdiction when he finds any mistake apparent from the record . The word record as used in section 154 will include all that material which forms part of the assessment proceedings and not only the return. It is also not correct to say that if the assessee omits to claim a relief allowable to him under the provisions of the Income-tax Act, he is not entitled to get that relief. It is the duty of the ITO and other officers administering the Act to inform the assessee that he is entitled to a particular relief if it is apparent that he is so entitled from the material available in the proceedings of assessment. This duty has been highlighted by a circular issued by the CBR. For these reasons, the Gujarat High Court in Chokshi Metal Refinery case ( supra ) dissented from the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r precious metal or any alloy containing one or more of such precious metals : Provided that where any of the said assets is used by the assessee as stock-in-trade such asset shall be deemed as excluded from the assets specified in this sub-clause; ( iv )yachts, boats and aircrafts (other than those used by the assessee for commercial purposes); ( v )urban land; ( vi )cash in hand, in excess of fifty thousand rupees, of individuals and HUFs and in the case of other persons any amount not recorded in the books of account." From the above definition the relevant property, which can be taxed, can be taxed under clause ( i ) only. If the property is held by assessee as its business, then it is not a guest house or a residential house. Even if it is treated as a house it cannot be taxed if the same is stock-in-trade. According to the balance sheet of M/s. Krishna Organizers under which the relevant property has been held by the assessee, the property is held as business property. If it is not a guest house or residential house as already mentioned it cannot be assessed as an "asset" within the meaning of section 2( ea ) of the Act and in case it is considered a house for res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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