TaxTMI 
TaxTMI 
1983 (11) TMI 79
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.... 62,131 (Rs. 50,295 plus Rs. 11,836). On the basis of the following 'reasons recorded', the WTO reopened the assessment under section 17(1)(a) of the Act, on the basis that the net wealth chargeable to tax had escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment: "The assessments under the Wealth-tax Act have already been completed in this case for the years indicated below. The net wealth assessed includes value of property 365 Harrisganj, Kanpur. The relevant data is as under: Assessment Total net wealth Value of Remarks year assessed H. No. 365 Rs. Rs. 1964-65 &nbs....
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....sp; (as per books) . . . Rs. 57,013 1966-67 4,25,201 51,454 On page 5 of the return following arrear 'Factory Building, Harrisganj, Kanpur... Rs. 51,454' 1967-68 4,47,592 48,882 &n....
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....sp; ------- The assessee has shown this value in the return for the assessment year 1968-69 and is claimed exempt for residential house. The value as per books even as on 31-3-1964, 31-3-1965 and 31-3-1967 would be more than Rs. 82,878 because of the element of depreciation. As per details filed in the return for the assessment year 1968-69 and also the valuer's report---the new construction is of (Rs. 50,295 plus Rs. 11,836) Rs. 62,131. The rest represents appreciation in market value. The appreciation in value could not be in one year only. The value had been appreciating year after year. This clearly shows that the value of property number 365 Harrisganj had been understated in the return filed under section 14 of the Wealth-tax Act, 1957 for the assessment years 1964-65 to 1967-68. I have reason to believe that by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, the net wealth chargeable to tax has escaped assessment for the ....
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....he building were given therein, whereas in the original return the assessee had only disclosed the book value but not the cost of the land. He, therefore, submitted that the assessment had been validly reopened under section 17(1)(a). Referring to the impugned order of the learned Commissioner (Appeals) and to the copy of the original return and the assessment order for the assessment year 1970-71, he placed reliance on the decision of the Hon'ble Bombay High Court in the case of Dr. Keki Hormusji Gharda v. B.H. Raisinghani, WTO [1982] 135 ITR 386 and submitted that it overrode the decision of the Hon'ble Rajasthan High Court in the case of Brig. B. Lall v. WTO [1981] 127 ITR 308. 5. On the other hand, Shri H.P. Agarwal, the learned counsel for the assessee placed strong reliance on the order of the learned Commissioner (Appeals). He pointed out that the reopening of the assessment had been made under section 17(1)(a) and not under section 17(1)(b) to which the case of Dr. Keki Hormusji Gharda relied upon on behalf of the revenue related. Next, he pointed out that this was further clear from the fact that the assessment had been reopened after four years but within eight years o....
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....es had been accepted as per books at Rs. 82,544. The same was the position in the original assessment order. In the copy of the assessee's khata from Dewali 1962 to Dewali 1963 the book value of Ganges Flour Mill building is given as Rs. 57,012.71. The assessee is also right in pointing out that in the original assessment order the WTO had taken the valuation either as shown by the assessee in the return in respect of various assets or after making some changes as in the case of jewellery. It is pertinent to notice here that for the assessment year in question there was no valuation report given by the assessee or by the Departmental Valuation Officer. The only report which was there was of the assessee's valuer for the assessment year 1968-69 giving the value of the property as on 31-12-1967. The figure of Rs. 4,18,246 was arrived at by adding the cost of land (Rs. 36,440 plus book value of the building as on 31-3-1967 Rs. 4,64,338) thereby making a total of Rs. 82,878. According to the approved valuer, there was appreciation in the value of this property up to 31-12-1967 at Rs. 3,35,363 thereby arriving at a total value of Rs. 4,18,246. We agree with the contention raised on beha....