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TMI Blog2019 (11) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... 010-11, she filed her return of income on 31/7/2010 declaring taxable wealth of Rs. 40,07,88,700/- and such wealth is comprised of jewellery and motor cars/vehicles. Subsequently, the assessee found a fraud committed by one of the jewellers from whom she had been purchasing jewellery in the earlier 10 to 12 years inasmuch as he misrepresented and had sold the jewellery of different quality from one claimed and charged from the assessee. The assessee got the entire jewellery tested/chartered at the India Gemmological Institute, Jhandewalan, New Delhi which is a government approved institute and basing on the report issued by the said Institute, the assessee came to know that the precious metals and the purchased by her from one Mr Govind Johri (proprietor of M/s K King of Jewels, Jaipur) were of inferior quality. Assessee, thereupon, lodged two FIR's with police against the said jeweller in respect of 8 items of jewellery worth Rs. 15.89 crores, namely, FIR dated 14/9/2011 in respect of 2 items amounting to Rs. 1,08,31,225/-and another FIR dated 15/11/2011 in respect of 6 items amounting to Rs. 14,81,13,452/-. 3. Assessee brought the said fraud to the notice of the learned Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the valuation suggested by the assessee in respect of the items covered by the FIR; and ii. accepting the revised valuation further items not covered by FIR only in respect of the items where the revised valuation is more than the returned valuation and ignoring the valuation of the items where the revised valuation is less than the returned valuation. She, therefore, filed this appeal with a prayer to accept the revised valuation in respect of all the items of jewellery whether or not covered by the FIRs. 7. Argument of the Ld. AR is that the authorities below should have considered that the tax under the provisions of the Act is leviable only on the market value of the jewellery as on the date of the valuation and when the fact of fraud resulting in the market value of the jewellery becoming lower than the returned value. He placed reliance on the valuation reports rendered by Sh. Rajesh Khanna, Sh. Ramesh Khanna and Sh. Anil Shankhwal providing the valuation in respect of the gems and items covered by the FIR and also the report of one Sh. Dass jewellers in respect of all the items of property whether or not covered by the FIR's. 8. He brought it to our notice that in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in the returns. He, therefore, submits that the interference in respect of value of such items is not warranted at this Tribunal. 12. In respect of the items of property that are not covered by the FIR, it is the submission of the Ld. DR that the authorities below are justified in their approach to value the jewellery inasmuch as the Ld. CIT(A) considered the submissions of the assessee and took a pragmatic view in indefinitely something wrong and respect of the same. 13. We have gone through the record in the light of the submissions made on either side. Section 3 of the Act clearly stipulates that every year on the corresponding valuation date the net wealth of every individual, Hindu undivided family and Company shall be brought to tax at the rates specified in schedule I. Section 7 says that subject to the provisions of subsection (2), the value of any asset, other than cash, for the purposes of this Act shall be its value as on the valuation date determined in the manner laid down in schedule III. Section 16A deals with the reference to the valuation officer. Schedule III in the light of section 7 (1) of the Act deals with the procedure to determine the value of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the jewellery items not covered by the FIR needs verification in respect of the valuation and as a matter of fact he had accepted the valuation in respect of certain items of jewellery where such revised valuation is more than the returned valuation. 17. According to the Ld. CIT(A) the assessee reported the value of jewellery on cost basis while filing the wealth tax return and no valuation of jewellery was made at the time of filing of the wealth tax return. Ld. CIT(A) therefore, found that the reporting of value of jewellery in the wealth tax return was not in accordance with the provisions of section 2 (ea) of the Act. L. CIT(A) further recorded a finding that the revised claim of assessee can be duly considered even if the same was not claimed in the wealth tax return and such a position of law is settled in the case of M/s Abhinitha foundation private limited 249 taxman 37. 18. Having directed the assessing officer to take the higher value of the jewellery not covered by FIR, as per the valuation report, Ld. CIT(A) made a reference to the Wealth Tax Act in terms of section 7 read with rule 18 of schedule III and said that the value of jewellery shall be estimated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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