COMMISSIONER OF WEALTH TAX Vs. SOMESHWAR SARAN KOTHIWAL

JUDGEMENT

(1.) At the instance of the Revenue Tribunal has referred the following three questions under Section 27(1) of the Wealth-tax Act, 1957 (hereinafter referred to as "the Act") for opinion of this Court relating to the assessment years 1980-81 to 1983-84:

(2.) Brief facts of the case are as follows: Assessee respondent (hereinafter referred to as "Assessee"} is an individual. His assets for the purposes of wealth-tax included various house properties, including 1/4th share in property known as "Town Hall" property, Moradabad. The other three co-owners of this property are assessee's brothers. The assessee had disclosed value of his share in the said property at Rs. 65,541/-, Rs. 71,491/-, Rs. 71,491/- and Rs. 71,905/- for the respective assessment years. This was accepted by the Assessing Officer when he framed the assessment. The assessee, however, went in appeal before the learned Commissioner of Wealth-tax (Appeals) agitating the addition made by the Assessing Officer on some other ground. The learned Commissioner of Wealth-tax (Appeals) noted that the value disclosed in respect of Town Hall property was not commensurate with the income from property, inasmuch as, the value disclosed was even less than or near about three times the rental income. The learned Commissioner of Wealth-lax (A) issued a show cause notice to the assessee calling upon him as to why the value should not be enhanced by taking recourse under the Wealth-tax Act and also as to why penalty should not be levied under Section 18(1)(c). The explanation given by the assessee was found unacceptable by the learned Commissioner of Wealth-tax (A) who by applying the Rent Capitalisation Method, enhanced assessee's share in the value of the property to Rs. 2,12,691/- for assessment year 1980-81, Rs. 2,06,741/- for assessment year 1981-82 and 1982-83 and Rs. 2,06,326/- for assessment year 1983-84. Against the order of Commissioner of Wealth Tax (Appeal) assessee filed appeal before the Tribunal. Tribunal has confirmed the order of Commissioner of Wealth Tax (Appeal). It appears that the order of Tribunal has become final inasmuch as the matter has not been further contested by the assessee.

(3.) In pursuance of the enhancement of the value of the property Commissioner of Wealth Tax (Appeal) also issued show cause notice for the levy of penalty. Explanation furnished by the assessee was rejected by the Commissioner of Wealth Tax (Appeal), who noted that the assessee had not given any basis for returning value of the property, whereas as per Rule IBB the value determined was far more. He levied penalty under section 18(1)(e).