9911796707
TMI Blog1993 (9) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 2,23,390 Smt. Shiela Rani Anand 19,57,098 1,80,000 3,00,000 C.L. Anand, HUF 26,96,307 1,04,039 1,88,495 ------------------------------------------------------------------------------------------------- 2. The assessees have claimed that the value of jewellery was disclosed on the basis of value shown in the immediately preceding assessment year as the said value was taken to be valid for 3 years as per the instructions of the CBDT. However, in the course of assessment proceedings, the assessee got the jewellery valued and furnished the report of registered valuer to the assessing officer before any discrepancy was detected. There is some dispute on this controversy but after considering relevant record, we are inclined to hold that the assessee bonafidely filed reports of registered valuer estimating higher value of jewellery than disclosed in the original returns. 3. The assessing officer took the value of jewellery more or less as estimated by the registered valuer and completed the assessments. He initiated penalty proceedings under section 18(1)(c) of Wealth-tax Act on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue of jewellery was shown in terms of Explanation 4. The levy accordingly has to be held unsustainable as the aforesaid Explanation was not applicable. These submissions were opposed by the learned Departmental Representative. 6. We have heard the parties. The learned CWT(A) has sustained penalty in each of the cases solely relying upon Explanation 4 to section 18(1)(c) of the Act. Thus the question before us is whether the aforesaid Explanation is applicable. If the answer to the question is in the affirmative, the penalties are required to be confirmed. 7. It is now appropriate to reproduce Explanation 4 to section 18(1)(c) of W.T. Act which is as follows : Explanation 4 : "Where the value of any asset returned by any person is less than seventy per cent of the value of such asset as determined in an assessment under section 16 or section 17, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of clause (c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value." The ingredients of the default as per the Explanation are : (1) value declared is of any asset; (2) whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision is made subject to rules under which value of certain specified assets is required to be determined. Thus assessed net wealth may contain value of asset taken on estimate or on determined basis or both basis. Though in a broader sense determination may include estimation, but for resolving question before us and as mode of computation, both do not signify the same thing. Here it would be advantageous to refer to dictionary meaning of words, "estimated", "determined" and "correct valuation" used in the Explanation. As per New Webster's Dictionary the words are defined as under : Estimate --- to form an approximate judgment or opinion regarding such items as the value, amount, size or weight of; to calculate, approximately; an approximate judgment or calculation, as of the value or amount of something.... Determine --- to settle, fix, establish; to come to a fixed resolution and intention in respect of; to resolve; to decide; to settle on some line of conduct. Determine --- Having a firm or fixed purpose; manifesting firmness or resolution. Correct value --- The value determined is fixed calculation based on definite data and not on guess work/approximation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n guess work. Two words reflect different and distinct mode of computation. 13. It is therefore reasonable to hold that in a case where value of an asset is returned and taken purely on estimate basis without any formula and on guess work, the penalty under section 18(1)(c) cannot be levied merely because value returned is less than 30% of value assessed. Only in those cases where value is required to be determined and there is difference of 30% and more and the assessee is unable to show any error in the computation made by the assessing officer or show that the returned value of asset is correct, the provision of Explanation 4 would be applicable. Only in such cases assessee can and is required to show that either the figure taken (from the balance-sheet or otherwise) are inaccurate or formula applied is wrong and there is no case of furnishing of inaccurate particulars. The above, in our view, would be a reasonable construction which would make the Explanation a workable provision. In other cases, due to lack of relevant data, the value of an asset is returned and assessed purely on guess work and estimate, it is impossible for the assessee to show that the value returned is c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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