COMMISSIONER OF WEALTH TAX Vs. NATWARLAL J JADAWALA

JUDGEMENT

(1.) At the instance of Commissioner of Wealth Tax, following question of law has been referred to this Court, for its opinion arising out of its order dated 18.12.1981:

(2.) The facts of this case are that during the previous year relevant to assessment year 1972-73, assessee was found in possession of a sum Rs.1,35,000/while, he was travelling in a car on 27.10.1971. In his return of income, assessee has shown Rs.1,35,000.00 as borrowings, in part III of the return. Assessee's explanation as to source of this borrowing was not found acceptable and the amount was deemed to be income of assessee from undisclosed source under the Income Tax Act for the assessment year 1972-73. Penalty proceedings in respect of concealment of income which was added to the assessee's income as income from undisclosed source were also initiated and penalties were levied. The Tribunal ultimately in the case of assessee under the Income Tax Act had found that disclosure of the transactions in part III of the return was a sufficient disclosure of the particulars of income and the assessee could not be said to be guilty of not disclosing material facts, truly and correctly and had deleted the penalty under the Income Tax Act on the said addition.

(3.) As Rs.1,35,000.00 shown by the assessee in his income tax returns as borrowings, were held to be income from undisclosed sources, said income was also treated part of the wealth owned by the assessee on the valuation date for the assessment year 1972-73 and 1973-74 successively and was added to the net wealth of the assessee, and for each year penalty for non-disclosure of such amount as his wealth was also levied. Since the minimum imposable penalty was to the extent value of asset particulars of which was not disclosed, and maximum was upto two times the said value, the Wealth Tax Officer in each case with the previous approval of Inspecting Assistant Commissioner levied minimum imposable penalty of Rs.1,35,000.00 for each years. The Appellate Assistant Commissioner on appeal deleted the penalty following decision of the Tribunal in Income Tax case. On further appeal by the revenue, Tribunal affirmed the order of the Appellate Assistant Commissioner on alternative grounds.