Law:

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Section 18 of the Wealth Tax Act, 1957 - Penalty - For failure to furnish returns, to comply with notices and concealment of assets, etc. Where assessee had valued its assets on certain basis and it was clear that method chosen for valuation of assets by assessee was a known method, non-acceptance of assessee's explanation regarding that would not attract penalty under section 18(1)(c) Where the assessee had valued its assets on certain basis and it was clear that the method chosen for the valuation of the assets by the assessee was a known method, non-acceptance of the assessee's explanation could not attract the penalty under section 18(1)(c) as the assessee had disclosed the assets, though he had employed a different method of valuation. JUDGMENT S.K. Kulshrestha, J.-This appeal is under section 27A of the Wealth-tax Act, 1957 which has been admitted on the following question of law; "Whether, on the facts and in the circumstances of the case and in law, the Income-tax Appellate Tribunal was justified in holding that the assessee has valued its assets on certain basis and non-acceptance of the assessee's explanation cannot attract the penalty under section 18(1)(c) in the case, even though penalty is imposable in view ofExplanation 4 to section 18(1) of the Wealth-tax Act". The respondent/assessee is a limited company which filed a return showing its net wealth as on March 31, 1988. According to the return of wealth, the showroom at Bombay was valued at Rs. 32,67,881, the value of car and jeeps was shown to be Rs. 5,54,903, while value of the plot was shown to be Rs. 1,108. In assessing the said value, the assessee had adopted the method of rent capitalization, while the value of automobile was arrived at on the basis of the written down value. The Department did not accept the valuation of the assessee and appointed its valuer for the purpose of valuation. The value of the showroom at Bombay was made on the basis of the market value and it was assessed at Rs. 52,48,000, while the value of the automobile was assessed at Rs. 11,55,499. As against the value of the plot in Indore of Rs. 1,108, the value of the plot was assessed at Rs. 1,10,000. Thus, the total…

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