Bona fide valuation dispute defeats wealth-tax penalty where the Tribunal finds no concealment and the statutory burden is discharged.

Penalty under Explanation 1 to Section 18(1)(c) of the Wealth-tax Act was not sustainable where the Tribunal found the assessee's valuation of shares to be based on a bona fide difference of opinion. On that finding, the statutory burden stood discharged and the reference to mens rea did not change the essential basis of the decision, which was absence of concealment. The deletion of penalty was therefore upheld and the question was answered in favour of the assessee.

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Issues: Whether the penalty under Explanation 1 to Section 18(1)(c) of the Wealth-tax Act, 1957 was liable to be sustained when the assessee's return adopted a different valuation of shares and the Tribunal found the dispute to be bona fide.

Analysis: The Tribunal had recorded a clear finding that the dispute regarding valuation of shares was a bona fide difference of opinion. On that finding, the assessee had discharged the burden cast by the statutory explanation. The references made to mens rea did not alter the substance of the Tribunal's conclusion, which rested on bona fide conduct and not on concealment.

Conclusion: The penalty was not justified and the Tribunal's deletion of the penalty was upheld. The answer to the referred question was, therefore, against the Revenue and in favour of the assessee.

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