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TMI Blog2015 (2) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... y. On verification of its returns of income for both the years under consideration i.e. 1997-98 and 1998-99, the AO found that the assessee company was the owner of the commercial property and although the same was an asset chargeable to wealth tax, no returns of wealth were filed by the assessee company within the time allowed under the relevant provisions of the Wealth Tax Act, 1957. He, therefore, issued notices u/s 17 of the Wealth Tax Act, 1957, in response to which, returns of wealth for both the years under consideration were filed by the assessee declaring net wealth of Rs. 1,12,50,000/- and Rs. 1,14,79,800/- as on 31/03/1997 and 31/03/1998 respectively. In the assessments originally completed u/s 16(3) read with section 17 of the W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orked out at 12.5 times of the net maintainable rent as per Rule 3 of Part A of Schedule III to the Wealth Tax Act, 1957, the AO noted that as per the proviso to the said Rule, the cost of acquisition of the immovable property should have been taken as the value for the purpose of Wealth Tax Act being higher than the value worked out at 12.5 times of the net maintainable rent. Accordingly, he adopted the cost of acquisition of Rs. 3,97,97,539/- as the value of the assessee's property for computing its net wealth and computed the total net wealth of the assessee at Rs. 3,84,32,539/- and Rs. 4,11,35,402/- for AY 1997-98 and 1998-99 as against the net wealth of Rs. 1,12,50,000/- and Rs. 1,32,42,700/- assessed originally thereby making addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty u/s 18(1)(c) of the Act. It was also pointed out that the value declared by the assessee of its commercial property in the returns of income originally filed was accepted by the AO in the assessments earlier made u/s 16(3) read with section 17 of the Wealth Tax Act, which again, was sufficient to show that there was definite basis on which the value of Mumbai property was declared by the assessee and the mistake in overlooking the proviso to Rule 3 of Part B of Schedule III of Wealth Tax Act, 1957 was a bonafide mistake. 5. The AO did not find merit in the submissions made on behalf of the assessee. According to him, the proviso to Rule 3 Part B of Schedule III of the Wealth Tax Act, 1957, was very clear and as provided therein, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven by the AO. Aggrieved by the order of the learned CIT(A), the assessee has preferred these appeals before the Tribunal. 7. The learned Counsel for the assessee mainly reiterated before us the submissions made on behalf of the assessee before the authorities below in support of his stand that the penalties imposed by the AO u/s 18(1)(c) and confirmed by the CIT(A) are not sustainable. He invited our attention to the copies of statement of total wealth filed by the assessee along with its original returns of net wealth to point out that the cost of acquisition of Mumbai property was clearly disclosed by the assessee. He submitted that the value of the said property for wealth tax purpose was declared by the assessee at 12.5 times of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Delhi High Court in case of CIT Vs. Brahmaputra Consortium Ltd., 348 ITR 339 (Del.). 8. The learned DR, on the other hand, submitted that the value of Mumbai property declared by the assessee was contrary to the proviso to relevant Rule 3 of Part B of Schedule III of the W.T. Act and since the said proviso was very clear and unambiguous, it cannot be said that omission to consider the said proviso, was a bonafide mistake of the assessee. He contended that the value declared by the assessee of the Mumbai property, thus, was patently wrong in view of the relevant proviso and penalty u/s 18(1)(c) is clearly attracted in its case as rightly held by the authorities below. He also contended that non-inclusion of the value of the motor ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 10. As regards the action of the assessee in not disclosing the value o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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