9911796707
TMI Blog1991 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... that he had shares worth Rs. 20,500. The name of the company of which shares were held was not disclosed. However, a statement of wealth-tax as on March 31, 1975, was filed. This indicated that the petitioner had 200 equity shares of Rs. 100 each of Continental Construction Pvt. Ltd., valued at Rs. 20,000 and 5 equity shares of Rs. 100 each in Basi Agriculture Farm valued at Rs. 500. During the assessment proceedings, the income and expenditure account as well as the balance-sheet of the petitioner was filed with the Wealth-tax Officer. A certificate on behalf of Continental Construction Pvt. Ltd., dated December 6, 1978, was also produced which certified that the petitioner was holding 200 equity shares of Rs. 100 each of the said company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment cannot be issued (see Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC)). According to section 17(1)(a) as it stood at the relevant time, a notice seeking to reopen the assessment could be issued, inter alia, on the ground that the assessee had not disclosed fully and truly all material facts necessary for the assessment of his net wealth. Shri Rajendra contends that the use of the word "necessary" in the said section indicates that the petitioner should have disclosed to the Wealth-tax Officer, the break-up value calculated in accordance with the provisions of rule 1D of the Wealth-tax Rules. In our opinion, what the assessee has to do is to disclose all primary and material facts which can enable the Wealth-tax Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer. Merely because the value returned by him may not have been the correct market value calculated in accordance with rule 1D, it is no ground for our holding that the petitioner had not disclosed all the material and relevant facts. In this connection, reference may usefully be made to two decisions, one is Smt. Rajeshwari Birla v. WTO [1979] 119 ITR 629 (Cal). That was also a case where the question arose with regard to the valuation of unquoted shares. The assessee had filed a wealth-tax return valuing the unquoted shares and assessment had been made. Thereafter, a circular was issued whereby the mode of valuation was sought to be changed. Notices were then issued under section 17 of the Wealth-tax Act seeking to reopen the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the respondents seeks to agitate is that the petitioner has justified his valuing the shares at Rs. 100 each at the time when the original assessment was made. That, in our opinion, was not a duty which was cast by law on the petitioner. The petitioner was undoubtedly required to disclose fully and truly the extent of his shareholding in the company which, in this case, was a private limited company and the fact that the shares were unquoted and lastly the value which the petitioner placed on those shares. It is alleged that the shares were undervalued by the petitioner. Even if this be so, this is only an allegation by the Department based on the break-up value ascertained by it. The petitioner chose to value the shares as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Income-tax Officer sought to reopen the assessment by issuing a notice under section 147(a). A Division Bench of this court held that clause (a) of section 147 was not attracted because it was not the duty of the assessee to inform the Income-tax Officer that the property which had been sold at a price might not be commensurate with the market price on the date of the sale. This court, however, held that the impugned notice could be upheld under the provisions of clause (b) of section 147. The facts in the present case are pari materia similar to the case of Ganga Saran [1981] 130 ITR 212 (Delhi) and, applying the aforesaid ratio, we have no hesitation in coming to the conclusion that primary and material facts were disclosed by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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