9911796707
TMI Blog2021 (1) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... he common order of The Commissioner of Wealth - Tax (Appeals) - 2, Chennai dated 2802.2018 in WTA Nos.1&9/2014-15/A.Ys2006-07 & 2007-08/CIT(A)-2 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in confirming the order of re-assessment which order was passed without adhering to the prescription of law and consequently erred in sustaining the revised computation of net wealth without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the order of reassessment under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 4. The CIT (Appeals) erred in bringing to tax the value of 200 cts of diamonds, valued at Rs. 50 Lakhs in the recomputation of taxable net wealth without assigning proper reasons and justification. 5. The CIT (Appeals) failed to appreciate that the misreading of the MOU/ family arrangement and the civil litigation initiated in relation thereto would vitiate the decision in including the diamonds as part of the assessable net wealth. 6. The CIT (Appeals) failed to appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice. The case has been taken up for scrutiny and during the course of assessment proceedings the AO noted that consequent to death of Shri. Tushar Mehta, father of assessee, a MOU cum Deed of family settlement dated 13.01.2006 was entered into between family members including the assessee. As per the said MOU cum Deed of family settlement, certain business assets and non-business assets were distributed between the parties of the first to third part i) Vaidehi, ii) Tuhin T. Mehra, iii) Rohan T. Mehta and accordingly the assessee has received assets including a residential property at Mc Nichols Road, diamonds valued at Rs. 50 lakhs from Mehta Diamond Trust and certain gold jewellery. Out of the assets distributed as per MOU, the assessee has offered to wealth tax value of jewellery and silver articles, but not offered residential property at Mc Nichols Road and diamond valued at Rs. 50 lakhs receivable from Mehta Diamond Trust. During the course of assessment proceedings, the AO called upon the assessee to explain as to why residential property at Mc Nichols Road and the diamond receivable from Mehta Diamond Trust cannot be included in the taxable wealth, since the same has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute and the assessee has not received the assets as per the terms of MOU cannot be accepted. The CWT(A) further noted that once MOU has been entered and assets have been distributed, the assessee has become owner of such assets and consequently those assets are subject matter of wealth tax unless the same are exempt under the Act. Therefore, he opined that there is no error in the findings recorded by the AO to tax residential house property at Mc Nichols Road and diamonds received by the assessee as per the terms of MOU. Aggrieved by the CWT(A) order, the assessee is in appeal before us. 5. The ld.AR for the assessee submitted that the ld.CWT(A) erred in confirming additions made by the AO towards residential property at Mc Nichols Road and value of diamonds, even though the assessee has filed necessary evidences including copy of plaint filed before the Hon'ble Madras High Court challenging the operation of family settlement deed and further proved that the assessee has not received the assets as per terms of MOU cum family settlement deed dated 13.01.2006. The ld.AR further submitted that AO as well as CWT(A) have erred in arriving at a conclusion that by entering into MOU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been handed over to the assessee by his family members and because of this, the assessee has filed a plaint before the Hon'ble Madras High Court in CS No.574 of 2013, seeking to declare the MOU cum Deed of family settlement as null and void and non-est in law and, therefore said assets cannot be included in the taxable wealth for the impugned assessment years. We have gone through the findings recorded by the ld.AO as well as ld.CWT(A) in light of various evidences filed by the assessee including plaint filed before the Hon'ble High Court of Madras in CS No.574 of 2013 and found that the bone of contention before the Hon'ble High Court is distribution of assets including diamonds receivable from Mehta Diamond Trust. We further noted that as per the plaint filed by the assessee before the Hon'ble High Court, the assessee has challenged the MOU cum Deed of family settlement on the main ground that he did not receive assets distributed in pursuance of said MOU cum family settlement deed. Once MOU cum family settlement deed is the basis for distribution of asset among family members and such MOU cum family settlement deed is challenged before the Hon'ble High Court of Madras s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Hence, we set aside the appeals filed by the assessee for both assessment years 2006-07 & 2007-08 to the file of the AO and direct him to re-examine the issue regarding above two assets in light of various averments made by the assessee in accordance with law. 10. In the result, appeals filed by the assessee for the assessment years 2006-07 and 2007-08 are treated as allowed for statistical purpose. 11. WTA Nos.51 & 52/CHNY/2018 The facts and issues involved in these two appeals filed by the assessee are identical to the facts and issues which we had considered in WTA Nos.49 & 50/CHNY/2018 in the case of Shri Rohan T. Mehta for the assessment years 2006-07 & 2007- 08. The reasons given by us in preceding paras shall mutatis mutandis apply to these two appeals as well. Therefore for similar reasons, the appeals filed by the assessee for both the assessment years are set aside to the file of the AO and direct him to reconsider the issues in light of the observations given herein above in the case of Shri Rohan T.Mehta in WTA No.49 & 50/CHNY/2018. 12. In the result, the appeals filed by both the assessees for the assessment years 2006-07 & 2007-08 are allowed for statistical p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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