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TMI Blog2013 (8) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... is net wealth is below taxable limit, he stopped filing wealth tax returns. 3. Nevertheless the assessee had filed a statement of chargeable wealth, along with the income tax returns. The AO issued a notice u/s 17 of the Wealth Tax Act. In response the assessee filed return of wealth on 5.08.2002. The assessment was made u/s 16(3) r.w.s. 17 determining total taxable wealth at a figure higher than that which was returned by the assessee. 4. Aggrieved the assessee filed an appeal before the CIT (A), Muzaffar Nagar. The ld. CIT (A) Muzaffar Nagar, granted part relief. Further aggrieved the assessee carried the matter before the ITAT New Delhi, which restored the appeal to the file of the ld. CIT (A), Muzaffar Nagar. 5. Ld. CIT (A) Muzaffar Nagar, re-adjudicated the issue and confirmed part of the additions made by the AO. 6. On receipt of the order of ld. CIT (A), the AO issued a show cause notice to the assessee calling for an explanation as to why penalty u/s 18(1) (c) of the WT Act should not be levied. The assessee filed the reply, the AO rejected the explanation filed by the assessee and came to conclusion that the assessee furnished inaccurate particulars of wealth. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of opinion because of passage of time involving no omission of filing the assets owned by the appellant in the wealth tax returns but becoming taxable because of non-grant of exemption claimed which was in the appellant s mind when no returns were filed earlier and when filed u/s 17 exemption was claimed. In the circumstances simply because the wealth has been assessed at a positive figure and there is no change of omissions of any chargeable wealth is on account of difference of opinion and variation of rates offered/applied and as such the appellant cannot be held liable for penalty u/s 17 which in both the years deserves to be deleted. These contentions were rejected by the ld. C.W.T.(A). 7. While adjudicating the appeal for the A.Y. 1996-97, the ld. CIT (A) applied his findings in the A.Y. 1995-96. 8. For the A.Ys. 1997-98, 1999-00, 2000-01 and 2001-02 certain other issues arise. The facts have been brought out from page 2 onward in the CIT(A) s order dated 19.7.2011. These are extracted for ready reference: 4. A.Y. 1997-98: Ground of appeal Nos. 1 and 2 are against imposition of penalty u/s 18(1) (c) at ₹ 35,000/-. In the grounds of appeal it was clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of conversion of such assets in the year of declaration which were not claimed for technical reason when the exemption claimed was denied and such assets treated as capital assets as against business assets which did not mean that there has been furnishing of inaccurate particulars of wealth, so as to come within the clutches of Wealth-tax Act. Bonafides of the appellant of conversion of few capital assets to stock intrade is evident from the appellant s own action that he offered the difference of selling price over the cost of conversion in the A.Y. 2004-05 submitted on 15-03-2005, even before the matter came up for consideration before the 1st appellate authority in appeal preferred u/s 23 of the Wealth tax Act. The perusal of Income-tax return for A.Y. 2004-05 (computation attached comprising of statement of assessable income, accounts, computation of chart showing capital gain as well as surplus in respect of lands sold which were held in stock) and also of the revision of such returns made before the AO in the assessment u/s 143(3) made by the AO on 28-06-2006, where full details have been mentioned. The perusal of above will reveal that the sale proceeds of lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of any asset and it is only the valuation of the asset which is in dispute. (b) The assessee has valued the assets by adopting the cost index prescribed for computation of long term capital gains and whereas the AO adopted circle rate applicable to the area for valuation. (c) That the CIT (A) has not fully approved the valuation done by the AO and had partly reduced the same and that the ITAT further reduced the value, and that this shows that there is a difference in opinion on the issue of valuation and that levy of penalty on such difference in valuation is not warranted. (d) That no penalty can be levied when there is mere variation in the valuation as all the assets were disclosed and there was no concealed assets. (e) That penalty has been levied on the ground that inaccurate particulars of wealth has been furnished and that the same is bad in law in view of the judgment in the case of CIT vs. Reliance Petroproduct Pvt. Ltd. 322 ITR 158 (SC). (f) On the second issue on which penalty was levied i.e. conversion of capital assets into stock-in-trade he submitted that assessment of the proceeds of sale as capital gains was due to mutual agreement with the reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2(ea) of the Wealth Tax Act 1957. On the first category i.e. variation in the valuation of capital assets, we find that the assessee has adopted valuation by applying the cost index prescribed for computation of capital gains and whereas the AO has adopted the circle rate fixed by the registrating authority for stamp duty purposes, for the purpose of valuation. When the matter travelled to the ld. CIT (A), the valuation done by the AO was reduced for the reasons given in his order. The Tribunal further reduced the valuation confirmed by the ld. CIT (A), Be it as it may, valuation is an opinion. The valuation done by the assessee, in our view, was a bona fide exercise. If an assessee values his assets as per the cost index prescribed by the Rules for the purpose of computation of capital gains, no fault can be found with the same. Though the assessee had not filed a wealth tax return suo-motto, he had in fact filed statement of chargeable wealth along with the income tax return. This shows the bona fide of the assessee. When the taxable wealth of the assessee was assessed by the AO at ₹ 1,16,42,500/-, the value of wealth determined subsequent to the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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