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2016 (1) TMI 257 - ITAT KOLKATA

2016 (1) TMI 257 - ITAT KOLKATA - TMI - Levy of penalty for concealment of wealth - Assessee responded that notice u/s 17 of the Act was merely issued due to change in opinion from the assessment records and does not attract the penalty provisions. - It was his submission that in the situation that prevailed as on the due date for filing the return of income the assessee was under bona fide belief that there was no requirement for filing wealth tax return and therefore no adverse inference of co .....

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Sunil Surana, FCA For the Respondent : Shri Niloy Baran Som, JCIT-SRDR ORDER Per Waseem Ahmed, Accountant Member:- This appeal by the assessee is arising out of order of Commissioner of Wealth Tax (Appeals) Central-II, Kolkata in appeal No.4/CC-XVII/CWT(A)CII/ 11-12 dated 10.12.2013. Assessment was framed by DCWT, Central Circle- XVIII, Kolkata u/s 18(1)(c) of the Wealth Tax Act, 1952 (hereinafter referred to as the Act ) vide his order dated 31.03.2011 for assessment year 2005-06. 2. Issue rai .....

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) and 2(ea)(vi) of the Act. Thus AO issued notice u/s 17 of the Act on dated 4.11.2009 to file the return of wealth. In reply to the notice, assessee has submitted his wealth tax return for the relevant year under consideration on 17.02.2010 declared net wealth at ₹ 49,88,575/- (20,20,227 + 30,50,000/-). Accordingly, AO framed the wealth tax assessment and issued notice for the concealment of wealth under the Act. Assessee responded that notice u/s 17 of the Act was merely issued due to ch .....

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having taxable wealth for A.Y 2005-06 but the return of wealth was not filed by him voluntarily. The return was filed only after the proceedings were initiated u/s. 17 of W.T. Act in financial year 2009-10. In the course of appellant proceedings, the appellant has contended that there was no concealment because the amount of cash in hand and the value of jewellery were duly disclosed in the balance-sheet as at 31.03.2005 and filed along with the return of income. However, I am not inclined to ag .....

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hat cash in hand was to be utilized for the purpose of business and therefore, it would not form part of the taxable wealth and against the value of jeweellery thee was tax liability and thereby the net value of the jewerllery would be less than the taxable limit. However, on careful consideration of fact, I find no force in the submission of appellant because in sec. 2(ea) of W.T. Act, the definition of assets has been provided. As per sec. 2(ea)(iii), jewellery, bullion, furniture, utensils or .....

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to be included and excluded for the purpose of wealth tax. The appellant was having substantial amount of cash in hand as well as jewellery and still he did not file his return of wealth voluntarily. Under the circumstances, I am of the opinion that the AO was justified in imposing the penalty u/s. 18(1)© of the Act. The penalty imposed by him confirmed. The ground no. 2 and 3 are dismissed. Being aggrieved by this order of Ld. CWT(A) assessee preferred second appeal before us on the follo .....

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nfirming the imposition of penalty when there was no concealment, the facts were disclosed before the AO in the Income Tax Return filed and the default, if any, for omission to file the return of wealth was only technical in nature for which no penalty should have been imposed. 4. For that the Ld. CWT(A) erred in confirming the imposition of penalty when there was no specific charge that the assessee concealed the particulars of any assets or furnished inaccurate particulars of any assets. Shri .....

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h-in-hand to the tune of ₹ 30,10,348/-. The aforesaid two items were regarded as Assets within the meaning of Sec.2(ea) of the Act and the quantum of wealth of the Assessee was determined at ₹ 49,88,578/- (Rs.20,28,,227 + ₹ 30,10,348 - ₹ 50,000 (exemption limit for cash in hand i.e., cash upto ₹ 50,000 is not to be considered for the purpose of determining taxable wealth). As per the law as it prevailed in AY 2005-06, if the quantum of wealth if it is above ₹ .....

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charge of wealth tax at ₹ 49,88,575/-. 6. It was his submission that there was bona fide reason why the Assessee did not file the return of wealth as on the due date for the relevant AY. He submitted that the cash as shown in the Balance Sheet of the Assessee for AY 2004-05 in income tax proceedings was cash generated from business and was meant to be used for business necessities. It was his submission that such cash being business asset cannot be regarded as Asset within the meaning of t .....

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f net wealth of the Assessee. The learned counsel for the Assessee also brought to our notice a decision of the ITAT Kolkata Bench in the case of Bimal Kumar Singh vs. DCWT WTA No.13/Kol/2010 for AY 2006-07 order dated 20.7.2011, wherein the tribunal has taken a view that cash in hand generated out of cash sales is business asset and cannot be regarded as asset u/s.2(ea)(vi) of the Act. 7. Regarding jewellery, the learned counsel for the Assessee brought to our notice that there were liability t .....

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excluded and the value of jewellery of ₹ 13,55,462/- alone is considered, the net wealth of the Assessee would only be ₹ 13,55,462/- which is well below the limit of ₹ 15 lakhs for filing return of wealth. 8. The learned counsel for the Assessee fairly submitted that the order of assessment u/s.17/16(3) of the Wealth Tax Act, for AY 2004-05 dated 31.3.2008 in Assessee s own case, was set aside in proceedings u/s.263 of the Act by the concerned CIT(A) but that was only after th .....

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