Income Tax Appellate Tribunal - Hyderabad
Shyam Sunder Agarwal, Hyderabad, ... vs Dcit, Circle-4(1), Hyderabad, ... on 21 March, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER
WTA No. 02/Hyd/2017
Assessment Year: 2006-07
Shri Shyam Sunder vs. DCWT, Circle - 4(1),
Agarwal, Hyderabad Hyderabad.
PAN- ACZPA8366L
(Appellant) (Respondent)
Assessee by : Shri A.V Raghuram
Revenue by : Smt. N. Swapna
Date of hearing : 21-03-2018
Date of pronouncement : 21-03-2018
ORDER
PER D.S. SUNDER SINGH, A.M:
This appeal is filed by the assessee against the order of the CIT(A)-3, Hyderabad dated 02.11.2016 for the A.Y 2006-07. The assessee has filed the Wealth Tax return declaring the net wealth of Rs. 1,42,75,940/- on 19.05.2008. The case was selected for scrutiny and in the course of assessment proceedings, the A.O noticed that the assessee had excluded the following items of jewellery consisting of pearls and stones from the net wealth:
(i) Pearls and stones : Rs. 1,09,304
(ii) Stones : Rs. 1,27,500
(iii) Others : Rs. 14,300
2. The AO called for explanation of the assessee and the assessee explained that loose items not embedded in gold 2 WTA No. 02/Hyd/2017 Shri Shyam Sunder Agarwal, Hyderabad or silver or in any other precious metal is not includible in in net wealth. Not being convinced with the explanation of the assessee, the AO held that the pearls and stones covered under Sec. 2(ea) of the Wealth Tax Act under term "any other article" and accordingly brought the same to wealth tax.
3. Aggrieved by the order of the A.O, the assessee filed the appeal before the CIT(A) and the Ld. CIT(A) held that the pearls and stones included in the definition of asset/jewellery/semi-precious stones and are liable for the Wealth tax and accordingly dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A) the assessee filed the appeal before us on following grounds:
1. The order of the learned CIT(A) conf irming the order of the Wealth Tax off icer determining the net wealth at Rs.l,45,27,044 is not only erroneous both on f acts and in law but is perverse.
2. The learned CIT(A) f ailed to appreciate the f act that what is added by the AO of Rs.2,51,104 does not include semi precious stones at all to hold that the action of the AD is right on the ground that semi precious stones also falls under def inition.
3. The learned CIT(A) f ailed to appreciate that the valuation report narrates only pearls and colour stones and no where the valuer used the words semi precious and thereby erred in conf irming the addition of Rs.2,51,104 which is only value of assorted loose pearls and color stones.
4. The learned AO erred in levying interest ujs.17b which is for late of f iling of WT return though there is no delay in f iling of return of net wealth.
5. The learned AD erred in levying interest ujs.17a and 17c though there is no such provision.
6. Any other ground that may be urged at the time of hearing.3 WTA No. 02/Hyd/2017
Shri Shyam Sunder Agarwal, Hyderabad
4. Ground No. 1 and 6 are general in nature which does not require specific adjudication.
5. Ground No. 2 and 3 are related to the assessment of pearls and stones, stones and other items to Wealth Tax. The Ld. CIT(A) confirmed the addition made by the A.O holding that loose peals and stones are included in the definition of the asset/jewellery/semi-precious stones. For ready reference we extract the relevant part of the CIT(A) order in page Nos. 3 and 4 in para Nos. 4.2 to 4.4 which reads as under:
"4.2 The information on the record is caref ully considered the def inition of 'asset' for the purpose of Wealth tax reads as under:
[(ea) "assets", in relation to the assessment year commencing on the 1 s t day of April, 1993, or any subsequent assessment year, means--
(iii) jewellery, bullion and furniture, utensils or any other article made wholly or partly of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals:
Provided that where any of the said assets is used by the assessee as stock-in-trade, such asset shall be deemed as excluded from the assets specif ied in this sub-clause;
Explanation [1] - For the purpose of which this clause,--
(a) "Jewellery" includes--
(i) Ornaments made of gold, silver, platinum
or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones and 4 WTA No. 02/Hyd/2017 Shri Shyam Sunder Agarwal, Hyderabad whether or not worked or sewn into any wearing appeal;
(ii) Precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any wearing apparel;
4.3 As per the literature of Gems available on internet the def inition of precious and semi-precious stones are as under:-
"Any gemstones that is not a diamond, ruby, emerald or sapphire is a semi-precious gemstone. Calling a gemstone semi-precious does not mean it is less valuable than precious gemstones. ...Some semi-precious gemstones are not stones at all, but are made of organic material like amber, coral and pearl.
4.4 The precious stones are diamonds ruby, emeralds and rest of the items are semi-precious stones which includes hundreds of varients from non-organic source and also included organic material like coral & pearls. In f act some stones which are less valued like Tiger's Eye, Quartz are also classif ied as semi-precious stones. Further, as per the def inition itself whether they are sewn into apparel or not, they are liable to Wealth tax.
6. During the appeal hearing the Ld. AR argued that pearls are not precious stones and they are formed by the nature itself, therefore argued that pearls should not be included in the asset for the purpose of Wealth Tax. He also argued that pearls is neither precious stone nor semi- precious stone hence should not be included in the Wealth Tax. We have considered the argument of the Ld. AR as well as the Ld. DR carefully. As per the definition of jewellery in the Wealth Tax Act jewellery includes precious 5 WTA No. 02/Hyd/2017 Shri Shyam Sunder Agarwal, Hyderabad stones and semi-precious stones including the loose items not embedded in jewellery. The Ld. CIT(A) examined the definition of the gemstones in internet and held that loose pearls and stones are also includible in the definition of assets. Though the Ld. AR submitted that the pearls are not stones but separate bifurcation of pearls and stones was not submitted. The Ld. A.R did not place any decision to controvert the finding of the Ld.CIT(A). Therefore, as per the definition available in internet precious stones are diamond ruby emeralds and rest of them are semi-precious stones which include variants from non-organic stones. Hence we are of the considered opinion that the CIT(A) has rightly upheld the addition made by the A.O and we do not see any reason to interfere in the order of the Ld. CIT(A). Accordingly the appeal of the assessee on these grounds is dismissed.
7. Ground Nos. 4 and 5 are related levy of interest u/s Sec. 17a, 17b and 17c of the Wealth Tax Act. Levy of interest u/s Sec. 17a, 17b and 17c are mandatory in nature, hence these grounds of appeal of the assessee are dismissed.
8. In the result the appeal filed by the assessee is dismissed.
Pronounced in the open court on 21st March, 2018.
Sd/- Sd/-
(P. MADHAVI DEVI) (D.S. SUNDER SINGH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Hyderabad, Dated: 21 st March, 2018.
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WTA No. 02/Hyd/2017
Shri Shyam Sunder Agarwal, Hyderabad
KRK
1 Shri Shyam Sunder Agarwal, C/o K. Vasantkumar, A.V. Raghuram, Advocatges, 610, Babukhan Estate, Basheerbagh, Hyderabad-1.
2 DCWT, Circle-4(1), Hyderabad 3 CIT(A)-3, Hyderabad.
4 The Pr. CIT-4, Hyderabad.
5 The DR, ITAT Hyderabad 6 Guard File