9911796707
TMI Blog1984 (5) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... In the assessment year 1974-75, the WTO side his letter dated 28-12-1974 asked the appellant to file a valuation certificate from a registered valuer in respect of his jewellery. In spite of various opportunities being given to the assessee, he did not comply with the directions of the WTO. Instead, he persisted that the value of jewellery should be taken at Rs. 50,000 only in view of the likely depreciation in the value of the jewellery over the years. The WTO vide his letter dated 12-6-1975 asked the appellant to show cause why the value of jewellery should not be taken at Rs. 2 lakhs. The assessee, in reply, reiterated that the value should be taken only at Rs. 50,000. The WTO, however, adopted the value at Rs. 2 lakhs in each of these three years under appeal. 4. The WTO started penalty proceedings under section 18(1)(c) of the Act and issued notice to show cause why penalty should not be levied. The assessee submitted that there was no concealment. The WTO specifically asked the assessee to show cause why penalty may not be imposed under section 18(1)(c) for suppressing the value of jewellery. The assessee contended that the value adopted by the WTO was abnormal. The WTO he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ically asked the assessee to file a valuation report in respect of jewellery but the assessee did not comply with the WTO's direction. It was inconceivable in the opinion of the Commissioner (Appeals) that the value of jewellery, which was valued at Rs. 50,000 in the assessment year 1968-69, should also be the same in the assessment years under appeal when the market price of gold and precious stones had increased by several times. 7. As regards the assessee's contention that the natural guardian had filed a valuation certificate from a valuer Vaikunth Somaiya dated 25-1-1978 giving the value of jewellery at Rs. 70,000 and another certificate for the value of one ring at Rs. 5,000 before the Commissioner of income-tax (Appeals), the Commissioner of Wealth-tax (Appeals) noted that the valuation certificates suffered from serious defects and did not establish that the values of jewellery on the valuation dates was Rs. 50,000. The valuer had omitted to value four diamond bangles, one mang tika and one brooch on the plea that they were missing. He had also not given either the weight of the jewellery in gold or in diamonds. He, therefore, held that the value of jewellery could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been some increase in the value of jewellery. That the value of the remaining pieces of jewellery, except the three which were missing, was Rs. 70,000 as per the valuation report dated 25-1-1978 would further show that the value of jewellery had, in fact, increased. 9. The learned counsel for the assessee pointed out that the entire jewellery was sold in 1978 for Rs. 70,000. From this he wants us to infer that the value shown in the years under appeal was not arbitrary nor was it understated and levy of penalty was not justified, in the light of an order of the Tribunal, Bombay Bench 'B' in the case of Ajaypat Singhania in WT Appeal No. 78 (All.) of 1981, for the assessment year 1972-73, where the penalty had been cancelled. In that case, the jewellery had been valued at Rs. 25,000 and the approved valuer valued it at Rs. 29,170. Since the assessee was returning wealth of over Rs. 10 lakhs, the Tribunal held that the difference in valuation was nominal. Besides, in that case, on being asked to get the jewellery valued, the assessee had complied with the request of the WTO. The learned counsel of the assessee also relied on the Circular of the Board which is reproduced at page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appreciation of valuation, the learned counsel contended that the appreciation in the value depended on the type of jewellery and this jewellery was old and, therefore, did not appreciate in value. It was, however, conceded that for the assessment year 1971-72, the Tribunal had held that the valuation of this jewellery had increased from Rs. 50,000 to Rs. 55,000 and the assessee had accepted that order. He still contended that for the assessment year 1974-75, the declaration of the value of the jewellery at Rs. 50,000 was bona fide. He invoked the jurisdiction in equity and contended that the levy of penalty equal to the wealth concealed was a savage penalty and we should not levy the same. He, further, contended, that the levy of penalty equal to the net wealth concealed in the first year would reduce its net wealth by that amount and, therefore, there could be no recurring penalty. 12. As against this, the learned departmental representative relies on the orders of the authorities below and on the specific wording of the Explanation to section 18(1)(c) for contending that the levy of penalty was amply justified. When Parliament had laid down a certain basis for computing pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of jewellery and the exact particulars of the jewellery were also not made available to them, the valuation was set aside to get the jewellery valued by an expert on scientific basis. This would show that at least from April 1975, the assessee was alive to the fact that the jewellery had to be got valued from an expert but, as the order of the WTO for the assessment year 1974-75 shows, from 29-9-1976 till 21-3-1977, he gave various opportunities to the assessee's representative to file a valuation report but on 21-3-1977, the assessee's representative expressed his inability to do so. 15. The question arises whether on these facts levy of penalty would be justified or not. The learned counsel for the assessee contends that section 18(1)(c) justifies levy of penalty if any person 'has concealed the particulars of any assets or furnished inaccurate particulars of any assets or debts'. The contention is that the assessee has not concealed the particulars of the jewellery nor has he furnished inaccurate particulars of any assets or debts. We are of the opinion that this is without any merit altogether in view of the fact that Explanation to section 18(1)(c) is applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. It is contended that the assessee was a minor and his father may have been stubborn or obstinate but that would not justify the levy of penalty. In our opinion, when law permits a minor to own wealth at Rs. 20 lakhs or so and he can earn income through his guardian, so must he be answerable for the lapses of his guardian when he contravenes the law obviously for the benefit of the minor. The guardian had nothing personal to gain. His interest was not adverse to that of the minor since he was the father. Therefore, if the case of the assessee falls directly within the ratio of section 18(1)(c) read with the Explanation, penalty must lie even though he was then a minor. 17. We may point out that the circular of the Board on which reliance has been placed does not help the assessee in any way because we have not upheld the penalty merely for want of valuation report by an approved valuer but on the merits of the case after considering all the facts. The Tribunal's order in the case of Ajaypat Singhania is inapplicable because there the assessee had been co-operative with the department by filing the valuation report and the difference in the valuation was Rs. 4,000 when the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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