Law:

Section:

Section 17 of the Wealth-tax Act, 1957 - Reassessment - General - Assessment year 1970-71 - Assessee - HUF held shares in various companies including M Ltd. - In original assessment WTO accepted value of shares of M as quoted in stock exchange - Later on, Special Cell of Directorate of Inspection (Investigation) initiated to Commissioner that quotations of shares were manipulated and same was circulated to ITOs and WTOs - On said basis WTO issued notices for reassessment - It was apparent from records that aforesaid communication to WTO came in usual course and was received in discharge of official duties - Whether communication so received could be treated as 'information' within meaning of section 17(1)(b) and therefore, impugned notice for re-assessment issued on basis of said communication was valid - Held yes FACTS For the relevant assessment year wealth-tax return of the assessee-family was filed showing a net wealth of Rs. 11,58,454 on the valuation date, 31-3-1970, consisting, inter alia, of shares in various companies being both quoted and unquoted shares. The quoted shares were valued as on the date of valuation at the market rate prevailing, based on the official market quotation list of recognised stock exchanges. The unquoted shares were valued according to valuation reports of valuers. An order of assessment was passed by the WTO, whereby the family was assessed to wealth-tax on a net wealth of Rs. 15,22,360. Assessee was successful in first appeal so far as valuation of unquoted shares of two companies and exemption under section 5(1)(viii) was concerned. Revenue had filed Further appeal before the Tribunal. Thereafter, assessee's case was transferred to another WTO, who issued a notice under section 17 for re-opening the assessment on the ground that the wealth chargeable to tax had escaped assessment inasmuch as, on investigation conducted by the Special Cell of Directorate of Inspection (Investigation) regarding the genuineness of the quotation of shares, the Commissioner was informed by a letter that the close nature of shareholding of M Ltd. the infrequency of the quotations and the small turnover of the shares, coupled with the fact that…

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