Income Tax Appellate Tribunal - Chennai
Sri Kvp Nagarajan, Salem vs Dcwt Central Circle , Salem on 20 November, 2018
आयकर अपील य अ धकरण, 'बी' यायपीठ, चे नई IN THE INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH : CHENNAI ी अ ाहम पी. जॉज , लेखा सद य एवं ु आर.एल रे &डी, या)यक सद य के सम+ ।
ी ध$ु व% [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER] आयकर अपील सं./W.T.A. No.55/CHNY/2018 नधा रण वष /Assessment year : 2011-2012 Shri. K V P Nagarajan, Vs. The Deputy Commissioner of No.5A, Arunachala Asari Street, Wealth Tax, Dadubaikuttai, Central Circle, Salem 636 001. Salem [PAN ACYPN 9016B ] आयकर अपील सं./W.T.A. No.56/CHNY/2018 नधा रण वष /Assessment year : 2012-2013 Smt. C. Soundeswari, Vs. The Deputy Commissioner of W/o. Shri. KVP Chandrasekar Wealth Tax, No. 396/1, Trichy Main Road, Central Circle, No.1, Sivannar Street, Salem No.1 Gugai, Salem 636 006.
[PAN ATSPS 7042K] आयकर अपील सं./W.T.A. Nos.57 & 58/CHNY/2018 नधा रण वष /Assessment years : 2011-12 and 2012-2013 Shri. KVP Govindaraju, Vs. The Deputy Commissioner of Chamundi Street, Wealth Tax, Gugai, Central Circle, Salem 636 006. Salem [PAN AGOPG 5712B] :- 2 -: ITA No.55 to 68/2018 आयकर अपील सं./W.T.A. Nos.59 & 60/CHNY/2018 नधा रण वष /Assessment years : 2009-10 and 2010-2011 K. Prema, Vs. The Deputy Commissioner of W/o. KVP Kambadass, Wealth Tax, No.11/6, Chanmudi Street, Central Circle, Gugai, Salem Salem 636 006.
[PAN AJNPP 0293Q] आयकर अपील सं./W.T.A. Nos.61, 62, 63 & 64/CHNY/2018 नधा रण वष /Assessment years : 2009-10, 2010-11, 2011-12 and 2012-03.
B. Vijaya Vs. The Deputy Commissioner of No.4/95, Wealth Tax, Sowdeswari Temple Street, Central Circle, Singalandapuram, Salem Rasipuram 637 412. [PAN ACYPV 4676K]
आयकर अपील सं./W.T.A. Nos.65, 66, 67 & 68/CHNY/2018 नधा रण वष /Assessment years : 2009-10, 2010-11, 2011-12 and 2012-03.
KVP Balasubramani, Vs. The Deputy Commissioner of
Sowdeswari Temple Street, Wealth Tax,
Singalandapuram, Central Circle,
Rasipuram 637 412. Salem
[PAN ACJPB 5494J]
(अपीलाथ./Appellant) (/0यथ./Respondent)
अपीलाथ क ओर से/ Appellant by : Shri. T.S. Lakshmi Venkataraman, C.A.
यथ क ओर से /Respondent by : Shri. Homi Raj Vansh, IRS, CIT.
सन
ु वाई क तार ख/Date of Hearing : 19-112018
घोषणा क तार ख /Date of Pronouncement : 20-11-2018
:- 3 -: ITA No.55 to 68/2018
आदे श / O R D E R
PER BENCH:-
These are appeals of the following assessees against the orders listed against their respective names, for the impugned assessment years.
Assessees name Assessment Authorities passing Date of
year the order order
KV P Nagarajan 2011-12 Ld. PCIT, Central-2, 27.03.2018
Chennai.
C. Soundeswari 2012-13 Ld. PCIT, Central-2, 20.03.2018
Chennai.
KVP Govindaraju 2011-12 Ld. PCIT, Central-2, 26.03.2018
Chennai.
KVP Govindaraju 2012-13 Ld. PCIT, Central-2, 26.03.2018
Chennai.
K. Prema 2009-10 Ld. PCIT, Central-2, 26.03.2018
Chennai.
K. Prema 2010-11 Ld. PCIT, Central-2, 26.03.2018
Chennai.
B. Vijaya 2009-10 Ld. PCIT, Central-2, 19.03.2018
Chennai.
B. Vijaya 2010-11 Ld. PCIT, Central-2, 19.03.2018
Chennai.
B. Vijaya 2011-12 Ld. PCIT, Central-2, 19.03.2018
Chennai.
B. Vijaya 2012-13 Ld. PCIT, Central-2, 19.03.2018
Chennai.
KVP Balasubramani 2009-10 Ld. PCIT, Central-2, 20.03.2018
Chennai.
KVP Balasubramani 2010-11 Ld. PCIT, Central-2, 20.03.2018
Chennai.
KVP Balasubramani 2011-12 Ld. PCIT, Central-2, 20.03.2018
Chennai.
KVP Balasubramani 2012-13 Ld. PCIT, Central-2, 20.03.2018
Chennai.
:- 4 -: ITA No.55 to 68/2018
Grounds taken by the assessees for all the impugned assessment years are similar and assail the orders of the ld. Principal Commissioner of Wealth Tax (in short ''the PCWT'') holding the Wealth tax assessments done for the impugned assessment years as erroneous and prejudicial to the interest of the Revenue.
2. Ld. Counsel for the assessee submitted that all these assessee had filed returns pursuant to notices issued u/s.17(1) of Wealth Tax Act, 1957 (in short ''the Act'). As per the ld. Authorised Representative, ld. Assessing Officer after verifying the returns so filed and after considering all the details submitted by the assessee during the course of the hearings before him, had accepted the net wealth returned.
3. Continuing his submissions, ld. Authorised Representative stated that ld. PCWT invoking powers vested on him u/s.25 (2) of the Act ruled the assessments as erroneous and prejudicial to the interest of the Revenue. As per the ld. Authorised Representative, ld. PCWT took an erroneous view that the loans taken by the assessees could not be set-off against the cash held by the assessees at the end of the previous years relevant to the impugned assessment years, for the purpose of computing the net wealth. Contention of the ld. Authorised Representative was that ld. PCWT was under a mistaken notion that the net worth computed by ld. WTO was not in accordance :- 5 -: ITA No.55 to 68/2018 with Rule 1 of Schedule III of the Act. As per the ld. Authorised Representative, only the net wealth after deducting debts against each of the asset falling within the definition of that term in Section 2(m) of the Act could be reckoned while computing net wealth. Submission of the ld. Authorised Representative was that loans availed by the assessees were first credited to their respective bank accounts and later withdrawn in cash. Thus, according to him, the debts were relatable to the cash balance held. Relying on the judgment of Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Limited, 332 ITR 167, ld. Authorised Representative submitted that the ld. WTO had conducted due enquiries on the wealth tax returns filed by the assessees. According to him, it was not a case of lack of enquiry, and at the worst could be only a case of inadequate enquiry. In any case, as per the ld. Authorised Representative, ld. PCWT was trying to substitute his view by a lawful view taken by the ld. WTO. Reliance was also placed on a decision of Co-ordinate Bench in the case of Madanlal Chawla vs. ACWT (WTA Nos.69 to 72/CHNY/2018, dated 24.09.2018).
4. Per contra, ld. Departmental Representative submitted that ld. Wealth Tax Officer had not done enquiry required of him before finalizing assessments and this rendered his order erroneous and prejudicial to the interest of the Revenue. :- 6 -: ITA No.55 to 68/2018
5. We have considered the rival contentions and perused the orders of the authorities below. Orders of the ld. WTO for all the impugned appeals were almost typically worded except for the difference in the quantum's. Relevant para of the assessment orders which harp on the examination done during the course of the assessments is reproduced hereunder:-
'' In response to the above notice assessee's Authorised Representative, Shri. S.R. Sri Krishna, Chartered Accountant appeared on the various dates mentioned above and produced the details called for. Statement of wealth fixed assets and detailed working of taxable wealth was filed. The details submitted were examined with reference to the details filed in the I.T. returns of income. Copies of VAO certificate, chitta adangal etc., were filed in support of the claim of agi. Lands. Details of debts were also filed''.
Crux of the argument of the ld. Authorised Representative before us is that in the Wealth Tax returns filed by the respective assessees, debts which were incurred in relation to the cash was correctly shown and the ld. Assessing Officer had verified such returns with the details filed by the assessee, before accepting the Wealth Tax returns. According to him, it was clear and evident that there was proper enquiry conducted by the ld. WTO. Ld. Authorised Representative has also placed considerable reliance on a decision of a Co-ordinate Bench in the case of Madanlal Chawla (supra), which according to him, held that assessee was entitled to claim set off of the debts owed in relation to the asset ''cash on hand '' u/s.2(ea) (vi) of the Act. Paras 6 to 8 of :- 7 -: ITA No.55 to 68/2018 the order of the Co-ordinate Bench, which is apposite here, is reproduced hereunder:-
''6. In respect of assessment years 2009-10, 2010-11 & 2012-13 in WTA Nos.69 to 71/Chny/2018, ld.A.R submitted that when the original Wealth Tax Assessment was completed u/s.16(3) of the Act, the ld. Assessing Officer had considered the fact that the assessee was entitled to claim of set off of the debts owed in relation to asset 'cash on hand' u/s.2(ea)(vi) of the Act. It was a submission that even in the return filed, which was a statutory form, the allowable claim of debts against the cash balance by the assessee was provided in para 28.2 of the Wealth Tax Return Form BA. It was a submission that thus the order passed u/s.25(2) of the Act by the Principal Commissioner of Wealth Tax, Central-2, Chennai interpreting the provisions of the section 2(m) of the Act was only a change of opinion, which was not permissible for a revision u/s.25(2) of the Act.
7. In reply, the ld.D.R vehemently supported the order of the Principal Commissioner of Wealth Tax.
8. We have considered the rival submissions. Admittedly the return in Form-BA is a statutory form and in the said Form, provision has been provided for claiming the set off of the debts owed in relation to asset 'cash on hand'. When such set off is permissible while computing the value of the specified asset u/s.2(ea)(vi) of the Act, interpretation to section 2(m) is only a change of opinion. In any case, the ld. Assessing Officer, when completing the assessment u/s.16(3) of the Act, has also examined the issue of assessee's claim in respect of set off of the debts owed in relation to asset 'cash on hand'. Thus, the order passed u/s.25(2) of the Act by the Principal Commissioner of Wealth Tax is clearly on a change of opinion, which is not permissible for the purpose of revision.
This being so, the order passed u/s.25(2) of the Act by the Principal Commissioner of Wealth Tax, Central-2, Chennai is set aside as it is done on the basis of change of opinion, which is not permissible u/s.25(2) of the Act''.
No doubt in the said order, it was held that set off of the debts owed in relation to the asset ''cash on hand '' was permissible while computing the value of the specified assets u/s.2(ea) (vi) of the Act. However, what we find is that in the said case, loans which were considered for set-off against the cash were taken by the assessee on dates immediately prior to the date of valuation. As against this, in :- 8 -: ITA No.55 to 68/2018 the cases before us, there is a clear finding by the ld. PCWT that loans taken by the assessees, were cheques or directly transferred to banks and never received in cash. Further, the assessees had explained source of their investments in land, as coming out of the cash withdrawals. It is not a case were cash balance was represented by cash loans. Thus, in our opinion, decision in the case of Madanlal Chawla (supra) relied on by the ld. Authorised Representative would not further assessee's case.
6. Coming to the question whether enquires were carried out by the ld. WTO, during the course of the assessments, the relevant para of the Wealth Tax assessment has been reproduced at para 5 above. No doubt, ld. Authorised Representative stated that assessees had filed various details called for during the assessment proceedings. However, there is nothing on record to show that ld. Wealth Tax Officer had enquired anything about the set-off claimed by the assessees against cash balance or received any reply specific to such enquiry. Charging Section 5 of the Act stipulates charge of wealth tax on net wealth. Net wealth is defined in Section 2(m) of the Act which is reproduced hereunder:-
''(m) "net wealth" means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the :- 9 -: ITA No.55 to 68/2018 valuation date which have been incurred in relation to the said assets;
Assets are defined in Section 2(ea) of the Act and clause (vi) therefore which ropes in cash in hand in excess of I50,000/- is reproduced hereunder:-
''(ea) "assets", in relation to the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year, means--
(i)..............................
(ii).............................
(ii).............................
(iv)..............................
(v).............................
(vi) cash in hand, in excess of fifty thousand rupees, of individuals and Hindu undivided families and in the case of other persons any amount not recorded in the books of account.
When the ld. WTO was faced with a situation when assessee claimed certain debts as incurred in relation to the cash in hand, it was his ardent duty under the Act, to verify whether such claim was tenable on facts and in law. In our opinion, lack of enquiry is pregnant from the Wealth-tax assessment orders. It not a case of inadequate enquiry. When a ld. WTO, who is having a duty to do a Wealth Tax assessment after conducting enquiry which are required of him, in discharge of his duties, does not do so, there is a clear non application of mind. Merely because details were filed by assessee or claim was made through a return would not make it a case, where necessary enquiries required under the Act were carried out. In our opinion, there was indeed a lack of enquiry on the aspect of cash balance held by the respective :- 10 -: ITA No.55 to 68/2018 assessees and such lack of enquiry rendered the Wealth Tax Assessments erroneous and prejudicial to the interest of the Revenue. Ld PCWT was justified in holding so. We do not find any reason to interfere with the orders of the ld. PCWT(A).
7. In the result, the appeals of the assessee are dismissed. Order pronounced on Tuesday, the 20th day of November, 2018, at Chennai.
Sd/- Sd/-
(ध$ु व%
ु आर.एल रे &डी) (अ ाहम पी. जॉज )
(DUVVURU RL REDDY) (ABRAHAM P. GEORGE)
या)यक सद य/JUDICIAL MEMBER लेखा सद य /ACCOUNTANT MEMBER
चे#नई/Chennai
$दनांक/Dated:20th November, 2018.
KV
आदे श क त'ल(प अ)े(षत/Copy to:
1. अपीलाथ /Appellant 3. आयकर आय*
ु त (अपील)/CIT(A) 5. (वभागीय त न/ध/DR
2. यथ /Respondent 4. आयकर आय*
ु त/CIT 6. गाड फाईल/GF