Bombay High Court

Nandlal Mukundlal Pittie vs Wto on 9 October, 2001

Equivalent citations: (2002) 75 TTJ Mumbai 603

Order

N. Vijayakumaran, J.M.

This appeal has been filed by the assessee against the order of the Commissioner of Wealth Tax (Appeals) XX, Mumbai, dated 13-7-1998. It relates to the assessment year 1990-91.

2. The assessee is the owner of the land at Currimbhoy Road, Pune. On the valuation report dated 12-11-1986, the assessee declared the value of the said land at Rs. 21,97,000. This was the value even as on Diwali 1984. During the course of assessment proceedings, the assessee has filed another valuation report which was dated 25-2-1988, wherein the said land was valued at Rs. 30,14,000 as on Diwali 1987. The assessing officer noted that within a time span of three years there was increase in the value by about Rs. 8 lakhs. He, therefore, estimated the value of the property at Rs. 40 lakhs rejecting the assessee's valuation reports.

3. The assessing officer initiated penalty proceedings under section 18(1)(c) of the Wealth Tax Act, 1957 for concealment of wealth or furnishing inaccurate particulars of wealth against the penalty notice the assessee submitted that by way of oversight the later valuation report was not taken into consideration by the assessee. It is pleaded that it was only inadvertence on the part of the assessee. The assessing officer was not satisfied with the explanation and levied the maximum penalty. On appeal to the Commissioner of Wealth Tax (Appeals) it was confirmed to the extent of Rs. 52,678 which was the maximum penalty instead of Rs. 1,00,000 levied by the assessing officer.

4. Aggrieved by this, the assessee preferred an appeal before the Tribunal.

5. We have heard the rival submissions in the light of the materials placed before us and the precedents relied upon. The learned authorised representative submitted that the assessee was in possession of two valuation reports dated 25-2-1988 and 12-11-1986. Out of oversight, while filing the return the latest valuation report was not filed and the value was also mechanically declared as per 1986 valuation report. This is only an inadvertence on the part of the assessee. The second valuation report, it was pointed out by the assessee was also filed by the assessee himself without any action taken by the assessing officer.

But the assessing officer estimated the value at Rs. 40 lakhs instead of taking the returned value of Rs. 30,14,000. The learned authorised representative further argued that there is no material relied upon by the assessing officer to support the estimated value of Rs. 40 lakhs. He further submitted that the assessing officer has estimated the value with the view to showing that the returned value is less than 70 per cent of the assessed value, so that Explanation 4 to section 18(1)(c) can be invoked. There is no other material or basis taken into consideration by the assessing officer to arrive at the figure of Rs. 40 lakhs. On the other hand, the learned Departmental Representative opposed this appeal and advanced his arguments in support of the findings of revenue authorities.

6. We have considered the rival contentions and the facts. That the valuation reports dated 25-2-1988, and 12-1-1986, are submitted only by the assessee is not disputed. In the year Diwali 1984 the value as per report is Rs. 21,97,000. In the year Diwali 1987 the value is Rs. 30,14,000. The assessing officer arrived at the figure of Rs. 40 lakhs without considering the nature and other relevant factors whether the value of Rs. 40 lakhs arrived at, is justifiable or not. He has not obtained any report from the Departmental Valuation Officer under section 16A to contradict the reports filed by the assessee's valuer. The learned authorised representative's submission that the assessee has furnished the relevant particulars and there is no concealment on the part of the assessee or furnishing of inaccurate particulars or concealment of facts is to be accepted as correct. The learned authorised representative's submission that the assessing officer deliberately raised the value of the property to Rs. 40 lakhs so that the case is brought out within the mischief of Explanation 4 of section 18(1)(c) seems to be a well taken argument.' The estimated value in itself will not amount to concealment. The Hon'ble Madras High Court in the case of CIT v. Apsara Talkies (1985) 155 ITR 303 (Mad), while deciding the case of levy of penalty has held that the estimation of value by the departmental valuer at higher figure than shown by the assessee cannot be said as concealment without evidence to show that the assessee had understated the value. Section 271(1)(c) of the Income Tax Act which is in pari materia to the section 18(1)(c) of the Wealth Tax Act, 1957. The assessee has also given plausible explanation for the two values he has given.

7. That there is no mala fide intention on the part of the assessee is established by the fact that he voluntarily filed the second valuation report. The first valuation report was originally filed out of oversight and was subsequently substituted with the latest valuation report which established the bona fide act of the assessee. We, therefore, hold that the assessee neither concealed his asset nor furnished inaccurate particulars thereby and cancel the order of penalty.

8. In the result, the assessee's appeal is allowed.