- (1.) THE following question has been referred to this Court at the instance of the assessee under s. 27 (1) : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the reopening of the assessment under s. 17(1)(a) was valid in law ?"
(2.) THE dispute relates to the two assessment years, namely, 1969-70 and 1971-72. The original assessment of the assessee, who is an individual, was reopened under s. 17(1)(a) of the WT Act, 1957, on the ground that in the net wealth earlier assessed, the wealth of Rs. 20,500 escaped assessment. The facts lie in a narrow compass : The assessee took a loan of Rs. 20,500 from the LIC on the security of a life policy on 23rd March, 1966, which was deposited in the fixed deposit with Hindustan Commercial Bank. He claimed exemption on the said amount in his WT return, which was allowed by the WTO. However, the said assessment was reopened and an addition was made of Rs. 20,500 in the net wealth of the assessee by the WTO by the order dt. 28th Feb., 1979, in respect of both the assessment years by separate orders on identical pleas. The aforesaid reassessment orders were set aside in appeal by the AAC of Wealth-tax by order dt. 20th March, 1980, on the finding that it was not a case of non-disclosure of material facts and as such the notice under s. 17(1)(a) of the WT Act was held bad.
(3.) THE Department filed two appeals before the Tribunal for the aforesaid two assessment years which were allowed by a common order dt. 29th Jan., 1981. Aggrieved against the order of the Tribunal at the instance of the assessee, the above reference was made to the High Court. We have heard Sri Vikram Gulati, advocate, for the assessee, and Sri Bharat Ji Agarwal, senior advocate assisted by Sri A. N. Mahajan, for the IT Department. The Tribunal has found that mere mention that the amount of Rs. 20,500 was a loan from the LIC does not amount to disclosure of the fact that this loan was secured against the life policy of the assessee which was exempt from wealth-tax. In the WT return there was a specific requirement that such debt should not be claimed as deduction. If the assessee claims such a deduction without mentioning the relevant fact that the debt was secured against the life policy of the assessee, it amounts to nondisclosure of the relevant materials for the purposes of assessment.;