Per Shri DY. Junnarkar, Accountant Member - The revenue has filed these appeals against the orders of the Commissioner (Appeals) holding that the case did not fall in the ambit of Explanation 4 to section 18(1)(c) of the Wealth-tax Act, 1957 ('the Act') and, consequently, in cancelling the penalties levied by the WTO under section 18(1)(c) for each of the six years under consideration.

2. During the years under consideration, the assessee's wealth consisted of one-fourth share in an immovable property known as Harilela House and also a Flat No. 51A in Anita Apartments, Mount Pleasant Road, Bombay. The assessee disclosed the value of the one-fourth interest in the Harilela House at Rs. 1,54,528 for each of the six years. The WTO, however, valued this one-fourth interest at Rs. 4,12,685 for the first two years, at Rs. 4,18,445 for the next three years and at Rs. 4,14,645 for the last year under consideration. He valued this property as per the depart-mental Valuation Officer's report under section 16A of the Act. Likewise, in respect of the flat in the Anita Apartments, the assessee disclosed the value of the flat at Rs. 60,000 for each of the years whereas the WTO valued this flat at Rs. 1,32,000 for the first two years and at Rs. 1,23,000 for the remaining four years under consideration. In consequence of the difference in the values of these two assets, there was a wide gap between the net wealth as declared and assessed as detailed below.

The assessee did not appeal against these assessments. When called upon to show cause why no penalty should be levied for the concealment of wealth, the assessee explained that there was no concealment of wealth. The difference between the declared and assessed wealth arose on account of the difference in the valuation of the two immovable properties. Accord-ing to the WTO, proviso to section 18 clearly stated that the difference exceeding 25 per cent was considered to be deemed concealment. As the assessee had not filed any appeal and had accepted the value assessed, he proceeded to levy the penalties under section 18(1)(c) which are as under :

3. The assessee appealed against the penalties levied by the WTO before the Commissioner (Appeals) on various grounds. During the course of the appeal proceedings, among various arguments made before the Commissioner (Appeals), it was brought to the notice of the Commissioner (Appeals) that there was no concealment of any wealth by the assessee. The assessee was a co-owner of the property along with the wives of the brothers of the assessee's husband, who were all partners in the firm of Harilela, Opposite GPO, Bombay. The assessee held a British passport and was permanently residing at Hong Kong. Both the properties were rented out. For attending to the wealth-tax affairs of the assessee, the assessee had appointed Shri B.G. Gandhi, a senior chartered accoun-tant, to look after the taxation matters. The returns were being filed by Shri Ishwardas Valiram Mahbubani, another co-partner in the firm of Harilela. The assessment proceedings were being attended to by Shri B.G. Gandhi. Even Shri B.G. Gandhi had not acted wantonly in declaring any value of the properties as he chose. He declared the value of the interest in the Harilela house as per the cost of the building as debited to the books of account in the firm of Harilela from which books the cost of the building was paid. Declaration of the value of an asset at cost was a recognised method of valuation. Therefore, there was no fraud involve