Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (7) TMI 464 - ITAT PUNE

2016 (7) TMI 464 - ITAT PUNE - TMI - Penalty leviable on the mortgaged assets claimed by the assessee as exempt u/s.2(m) of the W.T. Act - denial of deduction u/s.2(m) of the Act on account of mortgaged assets - Held that:- Tribunal in batch appeal has already deleted such addition/disallowance on the ground that properties mortgaged to the bank cannot be held as assets belonging to the assessee u/s.2(m) of the Wealth Tax Act. Since the quantum addition has already been deleted, therefore, no pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ission of assessee that those assets were valued by the bank valuer at higher rate for obtaining loan purpose and that was merely an estimate. Since the assessee has declared the valuation of the assets as per Sub Registrarís office for stamp duty purpose and since all the particulars are already furnished, therefore, we do not find any infirmity in the order of the CWT(A) deleting the penalty on account of the addition being the difference between the valuation report of the valuer of the bank .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

espondent : Shri M.K. Kulkarni ORDER Per R. K. Panda, AM The above batch of appeals filed by the Revenue are directed against the separate orders dated 11-01-2016 of the CWT(A)-2, Nashik relating to Assessment Years 2005-06 to 2009- 10 respectively. Since identical grounds have been taken by the Revenue in all these appeals, therefore, these were heard together and are being disposed of by this common order. 2. First we take up WTA No.06/PN/2016 as the lead case. Facts of the case, in brief, are .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act on the ground that these assets are mortgaged properties. During the course of assessment proceedings the AO noted that the claim of debts owed to the extent of ₹ 2,05,92,303/- as claimed in the submission u/s.2(m) of the Wealth Tax Act is not tenable since the debts are not owned by the assessee directly. The assets are provided only as security for the loans of the company. According to the AO when the company B.C. Biyani Projects Ltd. defaults, then the mortgaged assets of the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

u/s.2(m) of the Wealth Tax Act as debts owned. 4. The AO further noted that in order to arrive at the correct valuation the assessee has not adopted the fair market value determined for the purpose of obtaining loan. He observed that the assessee had given higher value to UCO Bank/Bank of Maharashtra. He therefore asked the assessee to explain as to why the difference between valuation of immovable properties covered by the valuation report of the UCO Bank and Bank of Maharashtra and the valuat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m of Wealth Tax liability from the net wealth. 5. The assessee preferred appeal before the CWT(A) who confirmed the order passed by the AO. Subsequently, the AO initiated penalty proceedings rejecting the various explanations given by the assessee. The AO levied penalty of ₹ 3,54,510/- being 100% of tax sought to be evaded. 6. In appeal the Ld.CIT(A) sustained the addition made by the AO on account of Wealth Tax payable as per the return filed in response to notice u/s.17. So far as the ad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

value prescribed by Government Sub-Registrar Office for stamp purpose is concerned he deleted the same by observing as under : 6.3 The second issue to be decided is whether the A.O. officer is justified in levying penalty u/s.18(1)(c) on the addition on account of difference between the value of the acids considered for loan purpose by the value of the bank at higher figure and the value of the assets considered by the assessee as per the value prescribed by Govt. Sub Registrar office for stamp .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

valuer. Therefore though the addition is justified, the issue is debatable and two views are possible. Therefore penalty for concealment of wealth u/s.18(1)(c) is not livable. Further the appellant has clearly mentioned in the returns of wealth that the assets have been valued at the rates prescribed by Sub Registrar s office for stamp duty purpose. Therefore the appellant has disclosed all the particulars of wealth and has not concealed anything from the department. It is also settled law that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

strar s office first stamp duty purpose as against valuation as per bank s valuer for loan purpose. The second issue is accordingly decided in favour of the appellant. 8. Aggrieved with such part relief given by the CWT(A) the Revenue is in appeal before us with the following grounds : 1. On the facts and in the circumstances of the case, the CWT(A) erred in reducing the penalty from ₹ 3,54,510/- to ₹ 5,995/- levied u/s.18(1)(c) of the Wealth Tax Act, 1957 by the AO. 2. On the facts .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppeal. 9. The Ld. Departmental Representative heavily relied on the order of the order of the AO. He submitted that the CWT(A) was not justified in reducing the penalty from ₹ 3,54,510/- to ₹ 5,995/- especially when the addition on account of difference between the valuation as per the bank and evaluation declared by the assessee has been confirmed. 10. The Ld. Counsel for the assessee on the other hand while supporting the order of the CWT(A) submitted that the disallowance u/s.2(m) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

partment. Further, addition to value of assets on the basis of valuer s report is merely an estimate and does not attract penalty u/s.18(1)(c) of the I.T Act. He accordingly submitted that the order of the CWT(A) be upheld and the grounds raised by the revenue be dismissed. 12. We have considered the rival arguments made by both the sides, perused the orders of the AO and CWT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied on by both th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ned, we find the Tribunal in WTA Nos. 27 to 31/PN/2014 and batch of other appeals order dated 31-07-2014 for A.Y. 2005-06 to 2009-10 has already deleted such addition/disallowance on the ground that properties mortgaged to the bank cannot be held as assets belonging to the assessee u/s.2(m) of the Wealth Tax Act. Since the quantum addition has already been deleted, therefore, no penalty u/s.18(1)(c) of the Act is leviable on account of such amount. 14. So far as levy of penalty on account of add .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se and that was merely an estimate. Since the assessee has declared the valuation of the assets as per Sub Registrar s office for stamp duty purpose and since all the particulars are already furnished, therefore, we do not find any infirmity in the order of the CWT(A) deleting the penalty on account of the addition being the difference between the valuation report of the valuer of the bank and the valuation as per Sub-Registrar s office for stamp duty purpose. In our opinion the reasons given by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vied u/s.18(1)(c) of the Wealth Tax Act, 1957 by the A.O. 2. On the facts and in the circumstances of the case, the CWT(A) ought to have confirmed the penalty levied on the issues, i.e. under valuation of property, that has been confirmed by the Hon ble ITAT. 3. The appellant craves leave to add, alter, modify, delete amend any of the grounds with prior permission of the Hon ble Pr. CWT, as per the circumstances of the case. 4. The appellant prays to file any of the additional evidence with prio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s and in the circumstances of the case, the CWT(A) erred in reducing the penalty from ₹ 4,97,721/- to ₹ 3,478/- levied u/s.18(1)(c) of the Wealth Tax Act, 1957 by the A.O. 2. On the facts and in the circumstances of the case, the CWT(A) ought to have confirmed the penalty levied on the issues, i.e. under valuation of property, that has been confirmed by the Hon ble ITAT. 3. The appellant craves leave to add, alter, modify, delete amend any of the grounds with prior permission of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Revenue is dismissed. WTA No. 09/PN/2016 (A.Y. 2008-09) : 20. Grounds raised by the Revenue are as under : 1. On the facts and in the circumstances of the case, the CWT(A) erred in reducing the penalty from ₹ 3,58,176/- to ₹ 3,028/- levied u/s.18(1)(c) of the Wealth Tax Act, 1957 by the A.O. 2. On the facts and in the circumstances of the case, the CWT(A) ought to have confirmed the penalty levied on the issues, i.e. under valuation of property, that has been confirmed by the Ho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version