COMMISSIONER OF WEALTH TAX Vs. VATSALA V

JUDGEMENT

(1.) IN this reference under section 27(3) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act"), the questions of law referred for the opinion of this court are as follows:

(2.) THE assessee is an individual and in relation to the valuation date March 31, 1973, relevant for the assessment year 1973-74, she filed a return on June 22, 1973, admitting a net wealth of Rs. 97,345. This included two items of immovable property, viz., a house bearing door No. 3, Bharathi Nagar First Street, T. Nagar, Madras, valued at Rs. 40,000 and door No. 22, Anderson Street, Madras, valued at Rs. 1,00,000. We are not concerned in this reference with the latter item of immovable property. On October 6, 1974, the assessee entered into an agreement for the sale of property bearing door No. 3, Bharathi Nagar First Street, T. Nagar, Madras, in favour of two persons for Rs. 75,000 and received an advance of Rs. 20,001 on that day and agreed to receive the balance of Rs. 54,999 within four months from that day, at the time of registration of the sale deed. Subsequently, on December 24, 1973, the assessee filed revised return including the value of certain jewellery which had not been originally shown, but retaining the value of the immovable properties a shown earlier, while completing the assessment, on March 27, 1974, the Wealth-tax Officer, in respect of the property bearing door No. 3. Bharathi Nagar First Street, T. Nagar, Madras, took the view that the value of Rs. 40,000 returned was not acceptable as that property had been subsequently sold in January 1974 for Rs. 70,000, deducting the stamp expenses, etc., though the total sale price was Rs. 75,000, and instead of the returned value of Rs. 40,000, adopted a value of Rs. 70,000. With reference to the difference of Rs. 30,000 in the value of this item of property, penalty proceedings were initiated and the assessee contended that the assessee had purchased the property in question under hire-purchase agreement with Bharathi Nagar Co-operative House Construction Society on June 3, 1971, for a consideration of Rs. 22,365 and it valuation in 1968 was Rs. 38,000, as it was fetching only a monthly rental of Rs. 250 even at the time of sale and, therefore, there was no concealment and the penalty proceedings should be dropped. THE Inspecting Assistant Commissioner was of the view that the provisions of section 18(1)(c) of the Act Stood attracted as the assessee had not admitted the correct market value of the property on March 31, 1973, and that the valuation report of 1968 could not be relied upon asthere had been a steep rise in the value of properties in that areas and the rental yield would not be relevant. Considering the entering into of the agreement for sale of the property by the assessee in October, 1973, and the value set out therein and the receipt of an advance of Rs. 20,001 by the assessee and the omission by the assessee to mention that value in the revised return, the Inspecting Assistant Commissioner imposed a penalty of Rs. 30,000 on the assessee. On appeal by the assessee before the Tribunal, the Tribunal found that the offer for the sale of the property was received by the assessee only subsequent to the filing of the return and the value reflected in the agreement entered into in October, 1973 was not indicative of the price as on March 31, 1973, and, as such, it cannot be concluded that the assessee had deliberately furnished inaccurate particulars of had concealed wealth and, therefore, the imposition of the penalty cannot be sustained.