TMI Blog2015 (2) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... pertinent to note here that even in response to notices issued by the AO for the second time u/s 17, the assessee did not disclose the value of motor cars by filing fresh returns of income and instead filed a letter stating that returns of wealth already filed by it may be treated as returns filed in response to the said notices. As such, considering all the facts of the case and the conduct of the assessee, we are of the view that the non-disclosure of the value of motor cars in the returns of wealth for both the years under consideration, clearly amounts to concealment of particulars of its assets by the assessee attracting penalty u/s 18(1)(c) of the Act. - penalty imposed by the AO u/s 18(1)(c) is sustained only to the extent it is in respect of addition made to the wealth of the assessee for both the years under consideration on account of value of motor cars. - Decided against the assessee. - WTA Nos. 17 & 18/Hyd/2014 - - - Dated:- 10-10-2014 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Petitioner : Shri K. C. Devdas For the Respondent : Shri B. Rama Krishna ORDER Per P. M. Jagtap, A. M. These two appeals filed by the assessee are direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value for the purpose of wealth tax was declared by the assessee at ₹ 1,27,50,000/- for both the years under consideration. Although the said value declared by the assessee was claimed to be worked out at 12.5 times of the net maintainable rent as per Rule 3 of Part A of Schedule III to the Wealth Tax Act, 1957, the AO noted that as per the proviso to the said Rule, the cost of acquisition of the immovable property should have been taken as the value for the purpose of Wealth Tax Act being higher than the value worked out at 12.5 times of the net maintainable rent. Accordingly, he adopted the cost of acquisition of ₹ 3,97,97,539/- as the value of the assessee's property for computing its net wealth and computed the total net wealth of the assessee at ₹ 3,84,32,539/- and ₹ 4,11,35,402/- for AY 1997-98 and 1998-99 as against the net wealth of ₹ 1,12,50,000/- and ₹ 1,32,42,700/- assessed originally thereby making addition of ₹ 2,71,82,539 and ₹ 2,96,55,602/- to the net wealth of the assessee as on 31/03/1997 and 31/03/1998 respectively. 3. The additions made by the AO to the net wealth of the assessee for both the years under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said rule, which clearly resulted in suppression of wealth by the assessee. He also held that similarly the non-disclosure of value of cars in the net wealth clearly amounted to concealment of particulars of its assets by the assessee company attracting the provisions of section 18(1)(c) of the W.T. Act. Accordingly, penalties of ₹ 2,71,825 and ₹ 2,96,556/- were imposed by the AO u/s 18(1)(c) for AYs. 1997-98 and 1998-99 respectively being 100% of the wealth tax sought to be evaded by the assessee in respect of additions made to its net wealth. 6. The penalties imposed by the AO u/s 18(1)(c) for AYs 1997-98 and 1998-99 were challenged by the assessee in its appeals filed before the learned CIT(A) and the submissions made before the AO were reiterated on its behalf before the learned CIT(A) in support of its case that the penalties imposed by the AO u/s 18(1)(c) are not sustainable. The learned CIT(A), however, did not find merit in the stand of the assessee and rejecting the same, he confirmed the penalties imposed by the AO u/s 18(1)(c) for both the years under consideration for the same reasons as given by the AO. Aggrieved by the order of the learned CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the proviso to relevant Rule 3 of Part B of Schedule III of the W.T. Act and since the said proviso was very clear and unambiguous, it cannot be said that omission to consider the said proviso, was a bonafide mistake of the assessee. He contended that the value declared by the assessee of the Mumbai property, thus, was patently wrong in view of the relevant proviso and penalty u/s 18(1)(c) is clearly attracted in its case as rightly held by the authorities below. He also contended that non-inclusion of the value of the motor cars in the net wealth by the assessee cannot be considered as inadvertent mistake in the facts and circumstances of the case, and the assessee cannot get away from penalty u/s 18(1)(c) by claiming it to be inadvertent mistake especially when it is a clear case of concealing the particulars of its assets by the assessee, which are chargeable to wealth tax. 9. We have considered the rival submissions and also perused the relevant material on record. It is observed that the value of Mumbai property was declared by the assessee company in its returns of wealth for both the years under consideration at 12.5 times of the net maintainable rent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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