COMMISSIONER OF WEALTH TAX Vs. S VENUGOPALA KONAR

JUDGEMENT

(1.) BY these petitions under section 27(3) of the Wealth-tax Act, 1957, the Commissioner of Wealth-tax, Tamil Nadu-II, Madras, requests this court to direct the Income-tax Appellate Tribunal, Madras, to state a case and refer the following questions of law for the opinion of this court in each of these cases :"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in cancelling the penalty levied under section 18(1)(c) of the Wealth-tax Act ?(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the department has not established that the assessee had concealed his wealth in the return filed by him when the assessee's value was far less than that fixed by the assessee's valuer ?(3) Whether the Tribunal's finding that the assessee is not guilty of concealment of wealth is based on relevant and valid consideration and is a reasonable view to take on the facts of the case ?" *The respondent in T.C.Ps. Nos. 112 to 115 of 1976 is one S. Venugopala Konar and these four petitions relate to four assessment years 1966-67 to 1969-70, T.C.Ps. Nos. 116 and 117 of 1976 relate to S. Venugopala Konar, legal representative to late M. G. Srinivasa Konar, in respect of two assessment years 1968-69 and 1969-70. T.C.Ps. Nos. 136 to 139 of 1976 relate to one S. Govinda Konar and they are referable to the four assessment years already referred to.

(2.) THE three assessees in this batch of petitions were two sons and the father and the matter related to the levy of penalty in respect of their return for purpose of assessment to wealth-tax. It related to the construction of a building, which, according to the finding of the Tribunal, was commenced on May 28, 1965, and ended on September 30, 1969. THE assesses had maintained a construction account and in that account they had actually entered the amounts spent for the construction work. According to such account, the amounts spent in the respective four years were as under :Year ending AmountRs.31-3-1966 30, 10131-3-1967 16, 67831-3-1968 11, 88531-3-1969 10, 500THE total cost of construction was said to amount to Rs. 90, 000. It is on this basis that the assessees had submitted the returns for the respective years. But the department did not accept those figures returned by them and proceeded to estimate the value of the wealth on the respective valuation dates on the basis of the valuer's report dated August 14, 1969. That valuer who is a chartered engineer estimated the cost of construction at Rs. 2, 27, 608 and the value as on August 14, 1969, after allowing depreciation for a period of five years, was arrived at Rs. 1, 89, 472. But the Wealth-tax Officer estimated the cost of construction at Rs. 2, 40, 000 and spread over that cost for the four years in question as follows :Assessment year AmountRs.1966-67 1, 30, 0001967-68 1, 80, 0001968-69 2, 10, 0001969-70 2, 40, 000It is with reference to the different between the value so arrived at by him and the value shown by the assessees that the proceeding were taken for the purpose of imposing penalty.