2021 (4) TMI 1019 - AT - Wealth-tax

Assessee's Appeals Remanded for Reconsideration

The Tribunal remanded the assessee's appeals for A.Ys 2003-04 & 2004-05 back to the AO for reconsideration in accordance with law. The AO was directed ... Revaluation of immovable property - continuity of valuation for succeeding assessment years - application of CBDT Circular No.3 dated 28.09.1957 to valuation - remand for de novo consideration - verification of existence of movable assets - admission and remand of question of exemptionRevaluation of immovable property - continuity of valuation for succeeding assessment years - application of CBDT Circular No.3 dated 28.09.1957 to valuation - Revaluation of the Banjara Hills and Madhapur immovable properties is to be reconsidered by the Assessing Officer in the light of CBDT Circular No.3 dated 28.09.1957 and, where applicable, the valuation fixed in A.Y.2002-03 is to be continued for the next two succeeding assessment years unless special overriding reasons justify revision. - HELD THAT: - The Tribunal noted that the CBDT Circular prescribes that valuation once fixed need not be disturbed for the two succeeding assessments except for special overriding reasons (for example, substantial improvements). The Circular permits adoption of municipal or comparable capital values and allows revaluation by the assessee with evidence. Applying that guidance, the Tribunal directed that the Assessing Officer must reconsider the revaluation of the Banjara Hills and Madhapur properties and, if the value was properly fixed in A.Y.2002-03, the same value should be adopted for the two succeeding years unless there are lawful grounds for substantial revision. The matter is remitted to the AO for de novo consideration in accordance with the Circular and law, with opportunity to lead evidence where relevant. [Paras 7]Revaluation remanded to the Assessing Officer for fresh consideration in accordance with CBDT Circular No.3 dated 28.09.1957; values fixed in A.Y.2002-03 to be adopted for the next two years unless justified revision exists.Admission and remand of question of exemption - chargeability of wealth tax - The assessee's additional ground regarding exemption of the Madhapur plot from wealth tax is admitted and remitted to the Assessing Officer for consideration in accordance with law. - HELD THAT: - The Tribunal admitted the additional ground asserting that the Madhapur plot is exempt under the relevant provision and held that the question had not been resolved by the authorities below. Rather than deciding the exemption on the record before it, the Tribunal remitted the issue to the AO for fresh consideration in accordance with law so that the factual and legal aspects can be examined with opportunity to the assessee to produce evidence and submissions. [Paras 7]Additional ground on Madhapur plot exemption admitted and remanded to the Assessing Officer for consideration in accordance with law.Verification of existence of movable assets - addition for movable properties - The Assessing Officer is directed to verify whether the movable assets existed during the relevant financial years and to refrain from making additions where the assets did not exist. - HELD THAT: - The Tribunal observed that the AO had taken values of movable properties from earlier years despite their non-existence during the relevant year. It directed the AO to verify the actual existence of the movable assets in the relevant year and, upon such verification, to withdraw any addition if the assets did not exist. The direction requires factual verification by the AO before any addition is sustained. [Paras 8]AO to verify existence of movable assets for the relevant year and make additions only if assets are shown to have existed.Remand for de novo consideration - Both appeals for A.Y.2003-04 and A.Y.2004-05 are remanded to the Assessing Officer for de novo consideration in accordance with law, with the assessee to be given a fair opportunity of hearing. - HELD THAT: - Having found that valuation and exemption issues require fresh consideration under the CBDT Circular and that verification of movable assets is necessary, the Tribunal remitted the matters to the AO for fresh adjudication. The remand covers reconsideration of immovable property valuations, adjudication of the admitted exemption ground, and factual verification of movable assets, all to be decided afresh in accordance with law and after affording the assessee an opportunity to be heard. [Paras 9]Assessee's appeals remanded to the Assessing Officer for de novo consideration; appeals treated as allowed for statistical purposes.Final Conclusion: The Tribunal remitted the matters in respect of valuation of immovable properties, admissibility of the exemption claim for the Madhapur plot, and existence of movable assets to the Assessing Officer for fresh consideration in accordance with CBDT Circular No.3 dated 28.09.1957 and law, affording the assessee a fair opportunity of hearing; the appeals are treated as allowed for statistical purposes. Issues:Assessee's appeals for A.Ys 2003-04 & 2004-05 against CIT (A) orders dated 28.02.2017.Analysis:1. The case involves a search and seizure action resulting in the assessee's statement regarding movable and immovable properties subject to wealth tax. Despite notices, the assessee did not file wealth tax returns for the relevant A.Ys.2. The AO attributed values to the assets as the returns lacked supporting documents, leading to additions of taxable wealth for A.Ys 2003-04 and 2004-05. The CIT (A) granted partial relief, prompting the assessee's second appeal to the Tribunal.3. Grounds of appeal challenged the CIT (A)'s decisions on additions made for properties at Banjara Hills and Madhapur, movable properties, and the need for further examination by the AO.4. The Counsel argued for maintaining values adopted in the previous A.Ys based on CBDT Circular No.3, dated 28.9.1957, and challenged the AO's increase in property values without proper justification.5. The assessee contended that values of movable properties from earlier years were wrongly considered by the AO, urging deletion of the addition.6. The Tribunal considered the CBDT Circular's guidelines on asset valuation and revaluation, directing the AO to reevaluate properties at Banjara Hills and Madhapur in line with the Circular. The AO was instructed to verify movable assets' existence during the relevant financial year.7. Consequently, the appeals were remanded to the AO for reconsideration in accordance with law, ensuring the assessee's right to a fair hearing.8. The Tribunal allowed the appeals for statistical purposes, emphasizing the importance of following legal procedures and guidelines in wealth tax assessments.