1990 (10) TMI 124 - AT - Wealth-tax

Tribunal revises jewellery valuation for assessment years, instructs AO to revise assessments.

The Tribunal directed the valuation of jewellery for the assessment years 1975-76 and 1976-77 at Rs. 68,827 and for 1977-78 at Rs. 76,000, a 10% increase. ... Registered Valuer, Valuer's Report, Voluntary Disclosure Of Income And Wealth Ordinance Issues Involved:1. Valuation of Jewellery2. Admission and its Evidentiary Value3. Applicability of Voluntary Disclosure of Income & Wealth Ordinance, 19754. Role of Registered Valuer's Report5. Determination of Net Wealth under Wealth-tax Act, 1957Detailed Analysis:1. Valuation of Jewellery:The primary issue revolves around the valuation of jewellery for the assessment years 1975-76 to 1977-78. The assessee had initially returned the value of jewellery at Rs. 59,268 for 1975-76 and Rs. 68,927 for the subsequent years. However, the Assessing Officer (AO) valued it significantly higher at Rs. 1,94,000, Rs. 2,13,400, and Rs. 2,33,000 for the respective years. The AO based his valuation on the figure disclosed by the assessee under the Voluntary Disclosure of Income and Wealth Ordinance, 1975, which was Rs. 1,83,000 as on 31-3-1974. The Tribunal noted that the assessee did not provide details of the jewellery or the valuer's report with the disclosure application, leading to a rejection of the assessee's contention of a lower valuation.2. Admission and its Evidentiary Value:The Tribunal examined the evidentiary value of admissions under Sections 17 to 31 of the Indian Evidence Act, 1872. It highlighted that a voluntary acknowledgment of fact is a strong piece of evidence but can be withdrawn or shown to be erroneous. The Tribunal emphasized that the strict rules of evidence are not fully applicable to direct tax proceedings, but admissions still need to be considered and evaluated. The Tribunal found that the assessee's admission in the voluntary disclosure did not include details of the jewellery, thus limiting its utility in determining the exact nature and quantity of the jewellery held.3. Applicability of Voluntary Disclosure of Income & Wealth Ordinance, 1975:The Tribunal noted that the voluntary disclosure scheme required the assessee to declare net wealth on oath, which was binding for the years covered under the scheme. However, for the assessment years under appeal, there was no such declaration. The Tribunal agreed that the assessee's admission in the voluntary disclosure had evidentiary value but was not conclusive or binding for the years under consideration.4. Role of Registered Valuer's Report:The assessee argued that the valuation shown under the Voluntary Disclosure was erroneous and provided a registered valuer's report estimating the jewellery's value at Rs. 68,827 as on 31-3-1976. The Tribunal found that the lower authorities had not considered this direct evidence and had solely relied on the earlier admission. The Tribunal emphasized that the valuation report by the registered valuer was an expert opinion and should be given due consideration unless contradicted by other material evidence.5. Determination of Net Wealth under Wealth-tax Act, 1957:The Tribunal referred to the relevant provisions of the Wealth-tax Act, 1957, particularly sections 3, 2(m), and 7, which outline the process for determining net wealth and valuing assets. The Tribunal highlighted that the first step is to ascertain the assets held by the assessee, followed by their valuation. The Tribunal found that the AO had not collected any material to contradict the registered valuer's report, and thus, the valuation provided by the valuer should be accepted.Conclusion:The Tribunal directed that the value of jewellery for the assessment years 1975-76 and 1976-77 be taken at Rs. 68,827 and for 1977-78 be enhanced by 10% to Rs. 76,000. The appeals were allowed, and the AO was instructed to revise the assessments accordingly. The Tribunal also clarified that the earlier order dated 20-2-1982 upholding the valuation for the preceding years did not apply to the current years under appeal due to the absence of a declaration and different factual circumstances.