TMI Blog2006 (5) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... declaring a net wealth of Rs. 17,22,600. The Assessing Officer assessed the net wealth of the assessee at Rs. 18,20,500, Rs. 14,73,500 and Rs. 17,74,200 for the assessment years 1989-90, 1990-91 and 1991-92 respectively. In the return filed originally for the assessment year 1989-90 the value of 40.845 cents of land with a building at Ernakulam was taken by the assessee at Rs. 16,00,000 for the purpose of computation of interest in M/s. Sreekumar Construction Co., declaring the net value of interest in the said firm at Rs. 6,81,851. The assessee filed the revised return to avail of the benefit of valuation under Schedule-III as envisaged in section 7(2) of the Act and the value determined and declared for the said 40.845 cents of land with a building in the revised return was Rs. 1,68,500 which is the same value declared for the assessment years 1990-91 and 1991-92 also. The Assessing Officer completed the assessments accepting the valuation declared by the assessee for all the three assessment years under consideration. 4. The above property in question was possessed by the firm M/s. Sreekumar Construction Co. in which the assessee was a partner. The said firm was dissolved as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT (Appeals) also upheld the Wealth-tax Officer's action. Now, the assessee has challenged the impugned order of the CWT (Appeals) before us. 6. We have heard Shri M.P. Ittyrah, the ld. CA for the assessee and Shri KK John, the ld. Departmental Representative for the revenue. The ld. AR of the assessee submitted that the assessee had disclosed fully and truly all material facts necessary for the assessment in the returns of net wealth and at the time of assessment proceedings under section 16(3) of the Act. It was further submitted that the valuation of 40 cents of land with building appurtenant thereto was adopted by the assessee as per Schedule-III which was accepted by the Assessing Officer. It was further submitted that the previous owner had purchased the properties in 1977 which were adjacent lands and converted into a single block and he has been using the said property as a single unit for9 years. The said property was transferred to the assessee in the year 1986 by a single document. It was contended that this is not a fresh information in the possession of the Assessing Officer and the assessee had furnished those details at the time of hearing under section 16(3). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and exclusively used by him for residential purposes throughout the year. According to the Assessing Officer, since 10.58 cents of land and building purchased as per one document was distinctly identifiable and the valuation of the entire plot of 40 and odd cents and building as one unit under Schedule-III resulted in escapement of net wealth. 9. On the background of the above facts, we will have to examine the provisions of section 17 of the Act which vests power or jurisdiction on the Assessing Officer if the wealth liable to tax has been escaped. At the same time, proviso is added to section 17 which restricts the power or jurisdiction of the Assessing Officer to take action under section 17 of the Act. Section 17 as it was brought on the statute book with effect from 1-4-1989 reads as under:- "17. (1) If the Assessing Officer has reason to believe that the net wealth chargeable to tax in respect of which any person is assessable under this Act has escaped assessment for any assessment year (whether by reason of under-assessment or assessment at too Iowa rate or otherwise), he may, subject to the other provisions of this section and section 17A, serve on such person a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under section 17:- (i) If there is a failure, on the part of the assessee to make a return under section 14 or section 15 or in response to a notice under sub-section (4) of section 16 or section 17(1). (ii) If the assessee fails to disclose fully and truly all material facts necessary for his assessment. 10. The Explanation added to sub-section (1) creates certain legal presumptions that production before the Assessing Officer of the account books or other evidence will not necessarily amount to disclosure and certainly this Explanation relates to situation No. (ii) i.e. failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment. 11. As far as the issue before us is concerned, that is in respect of the valuation of one property which was possessed by the firm. On the perusal of the assessment order passed under section 16(3), it is clear that the Assessing Officer has already examined the issue of valuation in respect of the sale of property. For the purpose of putting the facts in better light, the same are reproduced as under:- "....It was explained that while filing the original return the assessee did not take int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are made under section 16(3) of the Act, but at the same time, by virtue of Explanation to the proviso, merely because the books of account are produced and documents are produced that will not be sufficient on the part of the assessee and the assessee has to make conscious disclosure of all the material facts, is having no substance. The legislative intent in putting the bar on the powers of the Assessing Officer vide the proviso where the Assessing Officer has already exercised his powers to determine the correct assessable wealth and during that process the assessee has also appeared before the Assessing Officer and disclosed all the facts, is very clear that again and again under the pretext of determining the assessable wealth, the assessee should not be put to hardships. 15. In this case, on the perusal of the facts as noted by the Assessing Officer in the assessment order, it is clear that there was no omission on the part of the assessee to disclose the material facts in respect of the issue which is again made the subject-matter for reassessments. In our opinion, the assessee has disclosed all the material facts which were also examined by the Assessing Officer as far ..... X X X X Extracts X X X X X X X X Extracts X X X X
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