TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 256
X X X X Extracts X X X X
X X X X Extracts X X X X
....ake the appeal of the revenue for A.yr. 2002-03 in WTA No.2/Kol/2013. Since the issue in all the appeals is identical and our order for A.Yr.2002-03 herein below shall be identically applicable to all the impugned years mentioned herein above. 4. The brief facts of the case in WTA No.02/Kol/2013 for A.Yr. 2002-03 are that a search and seizure operation was conducted at the residential premises of the assessee on 28.02.2008, where books of account, documents and other valuables were found and seized by the department. During the course of assessment proceedings u/s 153A of the IT Act it was found that assessee had net wealth which is chargeable to tax for A.yr.2002-03 but no return of wealth was filed u/s 14 of the W.T.Act, 1957. Consequently notice u/s 17 of WT Act was issued on 26.03.2009. The assessment was completed u/s 17/16(3) of the WT Act on 31.12.2009 at net wealth of Rs. 16,48,99,500/-. Penalty proceedings u/s 18(1)(c) of WT Act, 1957 was initiated by issuing statutory notices. In the meantime Commissioner of Wealth Tax (A) disposed off the quantum appeal filed by the assessee vide order dated 31st May, 2011 to allow certain relief and the effect of the order was given on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e explain. Ans. The details as contained in the seized document are correct and were maintained for my own purpose and therefore there was no reason to write anything incorrectly therein. All the transactions were noted as was the true nature of the transaction. Therefore, the notings on account of Diamond were also in account of Diamond only and not any other source as alleged by you.' 3.2. The assessee carried the matter further by filing revised balance sheet showing the diamonds & jewelleries purported to have been acquired in the period 1993-94 upto 99-2000. 3.3 Subsequently, notice u/s 17 was issued and duly served upon the assessee. In response, the return of wealth disclosing net wealth of Rs. 10,38,99,474/- was filed on 27-10-2009. The case was selected for scrutiny. In course of the assessment proceedings, it was found that the assessee was in possession of urban land at Pune, gold coins & jewellery valued at Rs. 1,58,687/-, silver utensils of Rs. 7,020/- and cash in hand exceeding Rs. 50,000/- as on the valuation dated i.e. 31-03-2002. As stated elsewhere in this order that no return of wealth u/s 14, though the assessee had taxable wealth. 3.4. The assessee however,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f my undisclosed income in various period. Since the said assets did not stand disclosed in my Balance Sheet filed with my Income Tax Return, it would be absurd to assume that I would file wealth tax return disclosing the said assets. These assets have only been disclosed by me in my revised Balance Sheet filed after search and thereby in my wealth tax return, since the existence of the said assets was detected in the course of search at my residential premises. All the assets being undisclosed, there was no occasion to file any wealth tax return disclosing the assets in the wealth tax return, more so since the value of the disclosed assts in the original Balance Sheets did not exceed Rs. 15 lakhs." 4. Thus, it can be seen that the assessee was firm in his contention that diamond & golds were acquired and the fact of which was not disclosed in either of the return of income tax or in the return of wealth tax.. In fact, the conviction of the assessee that the assets were acquired prior to the F.Y. 2001-02 was affirmed by the Tribunal vide its combined order dt. 29-07-2011 in the case of the assessee in IT(SS) No.4 to 7/Kol/2011 for the A.Ys. 2006-07, 07-08 & 08-09. Thus, going by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (4) of section 16 or subsection (1) of section 17 and the Assessing Officer or the Dy. Commissioner (A) or the Commissioner (A) is satisfied that in respect of such person has assessable net wealth, then such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such assessment year, notwithstanding that such person furnishes a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice under section 17." 6. In the instant case, the assessee furnished explanation which fails to substantiate that all facts relating to the net wealth for the A.Y 2002-03 was disclosed. On the contrary, the assessee admitted having concealed the particulars of net wealth chargeable to tax. Therefore, the assessee's explanation has no merit and the sum is accordingly rejected. It can be seen that Explanation (3) of Sec. 18 is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and gold disclosed in the seized documents referred as RM-1/RM-2. But the AO included such assets in the net wealth because the assessee has himself shown the same in the return of wealth. The ld. AR further submitted before the ld. CIT(A) if the value of gold and diamonds are included then the return of wealth will go below the taxable net wealth. Therefore AO was not satisfied that assessee was having any taxable wealth. Accordingly since all the conditions to Explanation 3 are not satisfied therefore Explanation 3 cannot be made applicable. Therefore Explanation 5 has to be made applicable in the present facts and circumstances of the case. 5.2. Secondly the ld. Counsel for the assessee submitted before the ld. CIT that the general provisions cannot over ride the specific provision. He further submitted that the seized documents RM-I/RM-II includes gold and diamonds and also as per his disposition on 28.02.2008. The assessee also disclosed these assets and accordingly the assessee's case is covered under Explanation 5. He relied upon the decision of the Tribunal in the case of Industrial Development Bank of India reported in 297 ITR 267 (AT). The ld. CIT(A) accepted the explana....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has been stated in the statement of the assessee u/s 132(4) of the Act as per disposition so made u/s 132(4) of the Act. The assessee filed the return declaring the gold and diamond. We are of the view that AO is not justified in invoking Explanation 3 to section 18(1)(c) of the Act which explanation reads that quantum of penalty is leviable in respect of failure to furnish return of wealth in ordinary course as required u/s 14 of the WT Act read with section 17A of the WT Act and the AO is satisfied that the assessee has assessable net wealth for the relevant assessment year. It is also undisputed on one hand that the AO does not believe the existence and ownership of gold and diamonds even the same are disclosed in the seized documents in RM-1 and RM-2 and on the other hand the AO has included such assets in the net wealth showing that assessee has himself declared in the return of wealth. If the value of gold and diamonds is included, the net wealth of the assessee will be below the taxable limit and accordingly AO is not satisfied that the assessee is having taxable wealth and accordingly all the conditions as per Explanation 3 are not satisfied. The ld. Counsel for the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the present case it will not be justified to refer to the returned wealth u/s 14(1) of the Act for the initiation of penalty u/s 18(1)(c) of the Act. Therefore when there is no concealment there is no question of penalty u/s 18(1)(c) of the Act. Accordingly the ld. Counsel for the assessee relied upon the decision of ITAT, Delhi Bench in the case of Prem Arora vs DCIT (2012) 149 TTJ 590 where it has been held that the concept of a voluntary return of income may be important in penalty proceedings initiated in the course of normal assessment proceedings u/s 143(3) or 147 of the Act but not u/s 153A of the Act. When accepted by the AO then there is no concealment of income and consequently penalty u/s 271(1)(c) of the Act cannot be imposed. The concealment of income is to be determined with regard to the return of income in response to notice u/s 153A of the Act. Therefore in the present circumstances and facts of the case once the returned wealth is accepted by the AO u/s 153A of the Act then there cannot be a case of concealment of income or furnishing inaccurate particulars of income. In the circumstances and facts of the case the decision in the case of Prem Arora vs DCIT (supra....