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2018 (10) TMI 750 - HC - Wealth-taxEscapement of income chargeable to wealth tax - validity of reasons for issuing the notice - non filing of return under the Wealth Tax Act - Petitioner raised objections to the impugned notice mainly contending that the assessee has no net wealth and in fact, the balance-sheet shows negative capital balance - Held that:- Section 17 of the Wealth Tax Act, 1957 enables the AO to assess or reassess the net wealth of the assessee by issuing notice if he has reason to believe that net wealth chargeable to tax in respect of such person had escaped assessment. In the present case, admittedly, the assessee had not filed his return under the Wealth Tax Act. The Assessing Officer, in all probabilities, from the return of income filed by the assessee under the Income Tax Act and the documents annexed therewith noticed that the assessee had sizeable investment in fixed asset valuation of which along with cash in hand showed by the assessee came to ₹ 2.30 crores (rounded off) after reducing the exemption wealth of ₹ 30 lacs. He prima facie believed that net taxable wealth of ₹ 2 crore had escaped assessment. After recording proper reasons, he issued the impugned notice/ We see no reason to interfere. The assessee's contention that the loans were raised to acquire such capital assets would require exemption and therefore assessment. While disposing of such an objection, the Assessing Officer correctly observed that the assessee had not showed co-relation between the borrowing and the acquisition of assets. He noticed that in the income tax return, the assessee had claimed interest expenditure in relation to income from other sources. - Decided against assessee.
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