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31-10-2019, Kiran Nadar, Section 16A, 3, 7, 2, Tribunal Delhi

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1 week 4 days ago #11279 by amit
Section - 16A, 3, 7, 2
Order Date - 31-10.2019
Favouring - Assessee
Court - Tribunal Delhi
Appellant - Kiran Nadar
Respondent - ACIT
Justice - G.S. PANNU VP & K. NARASIMHA CHARY JM
Citation - 1119Taxpundit20
Appeal No. - W.T.A.Nos.02 & 03/Del/2018
Asstt. Year - 2010-11 & 2011-12

Order

PER : K. NARASIMHA CHARY, J.M.

Aggrieved by the orders both dated 27/3/2018 in appeal numbers 177 and 178/2017-18 for Assessment Years 2010-11 and 2011-12 respectively, passed by the learned Commissioner of Income Tax (Appeals)-42, New Delhi (“Ld. CIT(A)”), Smt. Kiran Nadar (“the assessee”) preferred these two appeals on identical grounds. Since the facts in these two appeals and the ground raised are identical, we deem it just and convenient to dispose of these two appeals by way of this common order, with reference to the facts for the Assessment Year 2010-11.

WTA No.02/Del/2018.

2. Brief facts of the case are that the assessee is an individual and a wealth tax assessee, filing returns regularly. For the Assessment Year 2010-11, she filed her return of income on 31/7/2010 declaring taxable wealth of Rs.40,07,88,700/- and such wealth is comprised of jewellery and motor cars/vehicles. Subsequently, the assessee found a fraud committed by one of the jewellers from whom she had been purchasing jewellery in the earlier 10 to 12 years inasmuch as he misrepresented and had sold the jewellery of different quality from one claimed and charged from the assessee. The assessee got the entire jewellery tested/chartered at the India Gemmological Institute, Jhandewalan, New Delhi which is a government approved institute and basing on the report issued by the said Institute, the assessee came to know that the precious metals and the purchased by her from one Mr Govind Johri (proprietor of M/s K King of ewels, Jaipur) were of inferior quality. Assessee, thereupon, lodged two FIR’s with police against the said jeweller in respect of 8 items of jewellery worth Rs. 15.89 crores, namely, FIR dated 14/9/2011 in respect of 2 items amounting to Rs.1,08,31,225/-and another FIR dated 15/11/2011 in respect of 6 items amounting to Rs.14,81,13,452/-.

3. Assessee brought the said fraud to the notice of the learned Assessing Officer in August, 2010 and requested the learned Assessing Officer that for the purpose of taxation under the Wealth-tax Act, 1957 (“the Act”), the taxable value of jewellery should be taken as per the value determined by the government approved valuer and not as declared in the return of wealth filed by the assessee. The assessee could not filed any revised return for the Assessment Year 2010-11, but made the claim by way of revised claim during assessment proceedings; whereas for the Assessment Year 2011-12, the revised claim was made by filing the revised return.

4. The claim of the assessee is apparently in respec of the jewellery of two descriptions, namely, the jewellery studded with fake/inferior quality stones which were sold to the assessee claiming to be of highquality Emeralds and Ruby in respect of which the assessee lodged an FIR with police and the jewellery which were sold at an inflated cost in respect of which no FIR could be lodged by the assessee.

5. Learned Assessing Officer, however, refused to consider the reduced value of the jewellery for the purpose of determining the net wealth of the assessee and passed the assessment orders. When the assessee preferred appeal, Ld. CIT(A) by way of impugned order dated 27/3/2018 held that the value in respect of the items of jewellery covered by the FIRs had not in the pending proceedings before the criminal courts and, therefore, the value pleaded by the assessee cannot be considered as market value; whereas the items of jewellery not covered by the FIRs, Ld. CIT(A) took into consideration the items in respect of which the value is more than the returned value but refused to consider the value of items in respect of which the value is less than the returned value. Ld. CIT(A), therefore, directed the Assessing Officer to consider the invoice value of the items of jewellery covered by FIR and

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