Joginder Singh, Judicial Member - The assessee is aggrieved by the impugned order dated 05/12/2012 of the ld. First Appellate Authority, Mumbai, The assessee raised the following grounds.

"I. The learned commissioner of Wealth-tax (Appeals) was not justified in upholding the validity of the reassessment proceedings. The initiation of the reassessment proceedings and also the reassessment order passed consequent there to are illegal and invalid.

II. The learned commissioner of Wealth-tax (Appeals) was not justified in confirming the addition of an amount of Rs.2,28,88,530/- to the net wealth of the appellant. He has erred in holding that a residential house and jewellery purchased by the wife of the appellant from a loan given to her by the appellant were to be included in the net wealth of the appellant."

2. At the time of hearing, Shri Hiro Rai, ld. Counsel for the assessee did not press ground no. 1 i.e. upholding the validity of reassessment proceedings; consequently, this ground is dismissed as not pressed.

3. The only effective ground raised by the assessee pertains to confirming the addition of Rs.2,28,88,530/- to the net wealth of the assessee holding that the residential house and jewellery purchased by the wife of the assessee from a loan given to her by the assessee were to be included in the net wealth of the assessee. The crux of arguments advanced on behalf of the assessee is that the entire effort of the Assessing Officer as well as of the ld. First Appellate Authority is that it is a tax avoidance by the assessee by submitting that for A.Y. 2006-07, the assessee paid Rs.10,25,00,000/- as tax. Our attention was invited to section 4(1)(a) of the Wealth tax Act. It was contended that the assessee has given a loan to his wife which cannot be said to be a transfer of asset. Reliance was placed upon the decision from Hon'ble Karnataka High Court in CIT v. Vinoda Rao [1993] 200 ITR 50/68 Taxman 96 and CIT v. Mrs. Hasina Begum (Wife) [1986] 158 ITR 215/[1987] 30 Taxman 210 (Kol.). It was explained that money given to his wife has been duly recorded in books of account. On the other hand, the ld. DR Shree Jeetendra Kumar strongly defended the conclusion arrived at in the assessment order/impugned order by pleading that it is an indirect transfer of the asset, therefore, the addition was rightly made in the hands of the assessee. Plea was also raised that simply to bring the taxable income in the lower bracket this arrangement was made by the assessee.

4. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee declared net wealth of Rs.2,75,28,460/- in his wealth tax return. The ld. Assessing Officer accepted the wealth declared by the assessee by passing an order u/s 16(3) of the Wealth Tax Act, 1957. The Revenue audit raised a query, consequently, notice dated 15/03/2011 u/s 17of the Wealth Tax Act, 1957, was issued to the assessee. The wife of the assessee, Ms. Gauri Khan, purchased a residential house at Delhi for Rs.1,65,95,000/- and jewellery worth Rs.70,22,658/- out of the loan of Rs.2,28,88,530/- given by the assessee. The Assessing Officer was of the view that wealth of the assessee escaped assessment, therefore, the loan amount of Rs.2,28,88,530/- was to be clubbed in the hands of the assessee for computation of his net wealth. He further observed that the jewellery would have been purchased by the assessee which he deliberately avoided, thus, there was indirect "transfer of asset" to the wife, by the assessee, therefore, within the meaning of provision of section 4(1)(a)(i) of the Wealth Tax Act, 1957, the transferred amount is to be included in the net wealth of the assessee. On appeal, the ld. Commissioner of Income tax (Appeals) affirmed the view of the Assessing Officer against which the assessee is aggrieved and is in appeal before this Tribunal.

4.1. In view of the above discussion, we are reproducing hereunder the relevant provisi