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TMI Blog2015 (6) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... the search operation itself, in the wealth tax return the Tribunal has approved the findings in quantum with regard to the genuineness of the declaration of gold and diamonds. Accordingly the assessee is not liable to have penalty u/s 271(1)(c) of the Act. - Decided against Revenue. - W.T.A Nos. 02 to 08/Kol/2013 - - - Dated:- 15-5-2015 - Shri Mahavir Singh, JM And Shri B. P. Jain, AM,JJ. For the Appellant : Shri Ajoy Kumar Singh, CIT For the Respondent : Shri Ravi Tulisyan, FCA ORDER Per Bench These seven appeals of the Revenue arise from two different orders of ld.CIT(A)-Central-I, Kolkata (CWT(A)-Central-I,Kolkata) for the Assessment Years 2002-03, 2003-04, 2004-05 and A.Yr.2005-06 by one order and for A.Yrs. 2006-07, 2007-08 and 2008-09 the second order each dated 06.11.2012. 2. The revenue has raised an identical ground in all the appeals which are reproduced herein below for A.Yr.2002-03 and in all other A.Yrs. the quantum of penalty u/s 18(1)(c) of Wealth Tax Act, 1957 is different : i) That Ld. CIT(A) erred in facts and circumstances of the case in deleting the penalty imposed on the assessee of ₹ 52,02,070/- u/s 18(1)(c)of the Wea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r from 15-4-93 to 23-22008. The document so seized further revealed that gold was purchased on two occasions on 20-9-2000 28-12- 2000 weighing 42 kgs. Similarly, diamonds were shown to have been purchased. In course of the search seizure operation, statement of Sri Vivek Kr.Kathotia was recorded u/s 132(4) of I.T.Act, 1961. The further statement of Sri Kathotia was recorded on 14-3-08. The relevant portion of the statement is reproduced below :- Q You sold gold worth ₹ 4.73 crore in the period 18-2-08 to 21-2-08 only one month back but you do not remember name address of person to whom gold was sold. Does not it prove that there was no actual sale of gold on above two dates and the sum of ₹ 4.73 cr. Represents unaccounted and undisclosed income of your from any other source ? Ans. The details as contained in the seized document are correct and were maintained for my own purpose and therefore there was no reason to write anything incorrectly therein. All the transactions were noted as was the true nature of the transaction. Therefore, the notings on account of Gold were also on account of Gold only and not any other source as alleged by you. Q. Your reply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,17,374/-. As stated earlier, the assessee preferred appeal against the assessment order of the A.O. before the C.W.T.(A), Central-I, Kolkata. Ld. CWT(A) vide his order dt. 31-5- 2011, confirmed the addition of ₹ 15,75,000/- on account of value of urban land at Pune. Ld. CWT(A) allowed relief to the assessee regarding the price of gold. The effect of the order was given on 11-7-2011 and net wealth was revised at ₹ 10,55,41,430/-. 3.5. Now, coming to the submission of the assessee, it needs to be mentioned that the only dispute relates to the satisfaction of the A.O. regarding initiation of penalty proceedings u/s 18(1)(c). It is evident from the foregoing paras that assessee was firmed in his contention that the assets, in question, in form of gold diamonds were acquired prior to the valuation date as on 31-3-2002. The assessee did not hesitate to reduce the same in writing. In fact, the assessee narrated the facts as to how he concealed the particulars of wealth vide his letter dt. 18-2-2010 and it will be relevant to reproduce the submissions of the assessee : In respect of your query as to why no return was filed under section 14 in spite of the fact that I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goes to show the Assessing officer was satisfied about the initiation of the penalty proceedings. In other words, primary facie satisfaction exists in the order. Now, the issue which is to be decided is whether penalty is to be levied or not in the present case. 5.2. In this context, the relevant explanations of Sec.18(1) are reproduced for the sake of convenience. Explanation 2 : Where in respect of any facts material to the computation of the net wealth of any person under this Act (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Dy. Commissioner (Appeals) or the Commissioner (Appeals) [or the Commissioner] to be false, or (B) Such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his net wealth have been disclosed by him. Then the amount added or disallowed in computing the net wealth of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the value of the assets in respect of which parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... calculated act which is evident from his brazen admissions. In fact he has scant regard for rule of the land inasmuch as he has no regret for his act of concealment as his evident from his shocking admission of his undisclosed wealth. 8. In view of the above, he does not deserve any leniency in so far as the quantum of penalty concerned and this type of blatant defiance of law needs to be dealt with firmly. Consequently, the maximum penalty will be the fitting reply for this brazen disregard of law of land. Therefore, I impose maximum penalty @ 500% of the tax or for that matter 5 times of the tax sought to be evaded which is calculated as under: Undisclosed net wealth : Rs.10,55,41,430/- Tax there on : Rs.10,40,414/- Tax sought to be evaded : Rs.10,40,414/- 5 times of the tax sought to be evaded Rs.10,40,414 x 5 Rs.52,02,070/- Order u/s 18(1)(c) is passed as above. Issue Demand Notice and copy of the order to the assesee. 5. The ld. DR relied upon the order of the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in response to notice u/s 17 of the WT Act filed the return of wealth in which the said gold and diamonds were disclosed as stated as per the valuer s report. There is no dispute that the value of gold and diamonds so disclosed in the return of wealth was disbelieved by the AO with regard to the existence and ownership by the assessee. Though the AO included these gold and diamonds in the assessed net wealth and as stated the gold as being 24 carat instead of 22 carat and 18 carat declared by the assessee which resulted in further addition as declared by the assessee. The ld. CIT(A) in quantum deleted/partly upheld the additions made by the AO and the appeal of the revenue was dismissed by the Tribunal for A.Yr.2008-09 on identical issue and with regard to the A.Yrs. 2006-07 and 2008-09 additions sustained by ld. CWT(A) were deleted by the Tribunal. However after giving the appeal effect the AO found that there was no much difference between the returned wealth and the assessed wealth. But however he initiated penalty proceedings u/s 18(1)(c) of the Act that the assessee has concealed income or furnished inaccurate particulars as per the seized documents marked as RM-1/RM-2 i.e. he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declared by him in any return of net wealth furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of the section, be deemed to have concealed the particulars of such assets or furnished inaccurate particulars of such asset, unless (1) . (2) he, in the course of the search, makes a statement under sub-section (4) of section 37A that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, forms part of his net wealth which has not been disclosed so far in his return of net wealth to be furnished before the expiry of the time specified in sub-section (1) of section 14 and also specifies in the statement the manner in which such net wealth has been acquired and pays the taxes, together with interest, if any, in respect of such net wealth. [emphasis supplied] 6.2. It is also not disputed that the statement recorded u/s 132(4) of the Act with regard to the ownership and existence of gold and diamonds recorded in the seized documents was accepted as genuine as purchase and sale of gold and diamond in the earlier years. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /07/2009 in ITA Nos. 175 6to 179/Kol/2009 (iv) ACIT vs Shri Amardeed Singh Dhanjal ITA Nos.33 to 37/Kol/2009 (v) Addl. CIT vs Prem Chand Gard 24 DTR (Del-TM) 513 (vi) CIT vs Bimal Kumar Damani 261 ITR 87 (Cal) (vii) CIT vs Kanhaiyalal 299 ITR 19 (Raj.,) (viii) CIT vs Mahendra C.Shah 299 ITR 305 (Guj) and (ix) CIT vws S.D.V. Chandru 266 ITR 175 (Mad). 6.4. In view of our findings herein above and the ratio of the decisions cited herein above AO is not justified in imposing penalty u/s 18(1)(c) of the WT Act 1957 for the impugned year and we find no infirmity in the order of ld. CWT(A), who has rightly cancelled the penalty so levied by the AO. 7. Now we take up the appeals of the revenue in WTA Nos. 3 to 8/Kol/2013 for A.Yrs. 2003-04 to 2008-09. 7.1. Since the issue in the present appeals is identical to the appeal of the revenue in WTA No.02/Kol/2013 as mentioned herein above, accordingly our decisions in WTA No.02/Kol/2013 of even date is identically applicable in the revenue s appeal in WTA Nos.03 to 08/Kol/2013 and accordingly all the appeals of the revenue in WTA Nos.03 to 08/Kol/2013 are dismissed. 8. In the result the appeals of the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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