Law: Wealth Tax Act, 1957

Section: 27(3),18(l)(c)

Wealth tax---Penalty---Concealment of wealth---Declaration of value of property on basis of valuation report of approved valuer ---Difference in estimate of valuation between approved valuer and departmental valuer ---Assessee's valuation bona tide---No deliberate understatement ---Assessee not guilty of gross or wilful neglect in returning. value----Cancellation of penalty by Tribunal justified---Indian Wealth Tax Act, 1957, 5.18(1)(c). The assessee purchased certain property on August 17, 1965 for Rs.17 lakhs. In 1965, she declared the value of the property for wealth tax purposes at Rs. 17 lakhs and stated that she had spent Rs. 1,42.750. For the assessment years 1966-67 and 1967-68; the assessee declared the value of the property at Rs. 12 lakhs but for the assessment years 1968-69 and 1969-70, the valuation .was shown at Rs. 7,76,800. On February 18, 1971, the property was sold for Rs. 22,60,000. For the years 1968-69 and 1969-70, the Wealth Tax Officer rejected the assessee's valuation and accepted that of the Departmental Valuation Officer at Rs. 19,21,000. Penalty proceedings under section 18(1)(c) of the Wealth Tax Act; 1957, kere initiated for furnishing inaccurate particulars. The Tribunal found that the figure returned by the assessee was bona fide and there was no deliberate understatement or furnishing of inaccurate particulars and, therefore, cancelled the penalty. On a reference: Held, that the Tribunal had found that the property had been purchased, at an enhanced price because the assessee wanted it in a particular locality and was also anxious to purchase it soon in order to save capital gains tax. The assessee had declared the value of this property at Rs.7,76,000 in the returns of wealth on the basis of the valuation report of an approved valuer. There had been difference of opinion in regard to the estimate of valuation between the approved valuer of the assessee, the Departmental valuer and the tax authorities. The Tribunal had taken into account the basic features, relevant aspects and had also indicated that the assessee made no attempt to understate the valuations. The conclusions were essentially factual and did not give rise to any…

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