2018 (8) TMI 994

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... The Appeal was admitted vide order dated 24th March, 2009 on the following question : "Whether on the facts and circumstances of the case and in law the Appellate Tribunal was justified in holding, despite the legal opinion to the contrary, that a Blank Bill of Exchange is a document pregnant with valued and whether such value is the market value of the asset on the valuation date i.e. 31.3.92 ?" 2. In the return of wealth filed on 31st August, 1992 the appellant-assessee declared total wealth of Rs. 16,67,926/-. It consisted, inter-alia, of Capital of Rs. 10,47926/- and deemed income declared voluntarily of Rs. 6,20,000/-. The deemed income showed in the return filed represents unaccounted income declared on account of seizure of u....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t appeal is preferred. 6. Heard Mr. Idnani, Learned Counsel for the appellant and Mr. Walve, for the respondent. 7. The issue relates to sustenance of addition towards the unaccounted wealth on the basis of the seized hundis. It appears, the premises of the assessee were searched on 21st January, 1990 and the assessee being a Finance Broker, 911 blank hundis were found. The matter travelled upto the Tribunal in income-tax proceedings. That for the Assessment Year 1992-93, a sum of Rs. 30,99,375/- was sustained by the Income-Tax Appellate Tribunal on account of undated Bills of Exchange in income-tax proceedings. The Tribunal considered all the factual details and as such the value of Blank Bills of Exchange/hundis found during the sea....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....such hundis and the Bills of Exchange were "inchoate" negotiable instruments and the realisation of the actual value of such Bills of Exchange/hundis was not possible. He would thus submit that the Bills of Exchange/hundis having been found of no actual value, the Tribunal ought to have held that such hundis/Bills of Exchange being inchoate negotiable instruments, had no market value. He submits that provision of Section 7 of the Wealth Tax Act, regulates how the value of the asset is to be determined and thus has taken us through the provisions of Section 7, as well as, Rules namely "Rules for determination of the value of the Assets" appended to Schedule-III of the Act. Mr. Idnani, would therefore submit, that the authorities below, inclu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lue for wealth tax purposes. In the case in hand, the Wealth Tax Officer, CWT (Appeals), as well as, the Tribunal has not done the aforesaid exercise, but instead adopted value of such inchoate instruments as found in the proceedings under the Income-Tax Act. In our view, the mode adopted to determine the value of the Bills of Exchange/hundis by the authorities under the Wealth Tax Act, as well as, by the Tribunal was contrary to the provisions of Section 7 of the Wealth-Tax Act. 13. That even otherwise, the Tribunal in para-6 of the impugned order, has recorded the finding in the following terms : "Coming now to the alternate ground, we find that the contention of the assessee is correct. In our opinion, the market value of the asset....