Section 4. Net maintainable rent how to be computed

4. Net maintainable rent how to be computed.— For the purposes of rule 3, "net maintainable rent" in relation to an immovable property referred to in that rule, shall be the amount of gross maintainable rent as reduced by— (i) the amount of taxes levied by any local authority in respect of the property ; and (ii) a sum equal to fifteen per cent of the gross maintainable rent. 4. Amendment introduced by the Direct Tax Laws (Amendment) Act, 1987 (w.e.f. 1-4-1989), has become redundant in view of omission of provision relating to additional wealth-tax. 5. Subs. by Act 46 of 1964, s. 3, for "financial year" (w.e.f. 1-4-1965). 6. Ins. by Act 18 of 1992, s. 90 (w.e.f. 1-4-1993). 7. Subs. by Act 66 of 1976, s. 27, for "at the rate or rates specified in the Schedule" (w.e.f. 1-4-1977). 8. Ins. by Act 20 of 2015, s. 81 (w.e.f. 1-4-2016). 9. Ins. by Act 33 of 2009, s. 83 (w.e.f. 1-4-2010). 10. Subs. by Act 3 of 1989, s. 59, for certain words (w.e.f. 1-4-1989). Earlier it was amended by Act 46 of 1964, s. 4 (w.e.f. 1-4-1965). 11. Subs. by Act 46 of 1964, s. 4, for sub-clauses (i), (ii) and (iii) (w.e.f. 1-4-1965). (ii) by a minor child, not being[1] [a minor child suffering from any disability of the nature specified in section 80U of the Income-tax Act or] a married daughter, of such individual,[2] * or (iii) by a person or association of persons to whom such assets have been transferred by the individual[3] [, directly or indirectly] otherwise than for adequate consideration for the immediate or deferred benefit of the individual, his or her spouse[4] *, or] (iv) by a person or association of persons to whom such assets have been transferred by the individual otherwise than under an irrevocable transfer,[3] [or] 4. Restored by s. 95, ibid . (w.e.f. 1-4-1989). Earlier subs. by Act 4 of 1988, s. 142 (w.e.f. 1-4-1989) and also substituted by Act 46 of 1964, s. 18 (w.e.f. -1-4-1965). 5. Subs. by Act 4 of 1988, s. 127, for "Wealth-tax Officer" (w.e.f. 1-4-1988). 6. Subs. by s. 127, ibid., for "Appellate Assistant Commissioner" (w.e.f. 1-4-1988). 7. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 8. Subs. by Act 4 of 1988, s. 127, for "Commissioner" (w.e.f. 1-4-1988). 9. Clause (a) omitted by Act 3 of 1989, s. 68 (w.e.f. 1-4-1989). Earlier it was amended by Act 46 of 1986, s. 33 (w.e.f. 10-9-1986). 10. The words "without reasonable cause" omitted by Act 46 of 1986, s. 33 (w.e.f. 10-9-1986). (c) has concealed the particulars of any assets or furnished inaccurate particulars of any assets or debts, he or it may, by order in writing, direct that such person shall pay by way of penalty— 1* * * * * 2[(ii) in the cases referred to in clause (b), in addition to the amount of wealth-tax payable by him, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such failure;] 3 5 [(v) by the son's wife, * of such individual, to whom such assets have been transferred by the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequate consideration,][6] [or] 6[(vi) by a person or association of persons to whom such assets have been transferred by the individual, directly or indirectly, on or after the 1st day of June, 1973, otherwise than for adequate consideration for the immediate or deferred benefit of the son's wife,[5] * of such individual or both,] whether the assets referred to in any of the sub-clauses aforesaid are held in the form in which they were transferred or otherwise: 7[Provided that where the transfer of such assets or any part thereof is either chargeable to gift-tax under the Gift-tax Act, 1958 (18 of 1958), or is not chargeable under section 5 of that Act, for any assessment year commencing[8] [after the 31st day of March, 1964, but before the 1st day of April, 1972,] the value of such assets or part thereof, as the case may be, shall not be included in computing the net wealth of the individual:] 9[Provided further that nothing contained in sub-clause (ii) shall apply in respect of such assets as have been acquired by the minor child out of his income referred to in the proviso to sub-section (1A) of section 64 of the Income-tax Act and which are held by him on the valuation date : 3[(iii) in the cases referred to in clause (c), in addition to any wealth-tax payable by him, a sum which shall not be less than, but which shall not exceed five times, the amount of tax sought to be evaded by reason of the concealment of particulars of any assets or the furnishing of inaccurate particulars in respect of any assets or debts: 4[Provided that in the cases referred to in clause (b), no penalty shall be imposable if the person proves that there was a reasonable cause for the failure referred to in that clause.] Explanation 1. —For the purposes of clause (iii) of this sub-section, the expression "the amount of tax sought to be evaded"— (a) in a case to which Explanation 3 applies, means the tax on the net wealth assessed ; (b) in any other case, means the difference between the tax on the net wealth assessed and the tax that would have been chargeable had the net wealth assessed been reduced by the amount which represents the value of any assets in respect of which particulars have been concealed or inaccurate particulars have been furnished and of any debts in respect of which inaccurate particulars have been furnished. Explanation 2. —Where in respect of any facts material to the computation of the net wealth of any person under this Act,— Provided also that where the assets held by a minor child are to be included in computing the net wealth of an individual, such assets shall be included,— (a) where the marriage of his parents subsists, in the net wealth of that parent whose net wealth (excluding the assets of the minor child so includible under this sub-section) is greater; or (b) where the marriage of his parents does not subsist, in the net wealth of that parent who maintains the minor child in the previous year as defined in section 3 of the Income-tax Act, and where any such assets are once included in the net wealth of either parent, any such assets shall not be included in the net wealth of the other parent in any succeeding year unless the Assessing Officer is satisfied, after giving that parent an opportunity of being heard, that it is necessary so to do;] 1. Ins. by Act 32 of 1994, s. 51 (w.e.f. 1-4-1995). 2. The words "to whom such assets have been transferred by the individual, directly or indirectly, otherwise than for adequate consideration," omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 3. Ins. by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 4. The words "or minor child (not being a married daughter) or both" omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 5. The words "or the son's minor child," omitted by s. 91, ibid . (w.e.f. 1-4-1993). 6. Ins. by Act 67 of 1984, s. 54 (w.e.f. 1-4-1985). 7. Ins. by Act 46 of 1964, s. 4 (w.e.f. 1-4-1965). (A) such person fails to offer an explanation or offers an explanation which is found by the[5] [Assessing Officer] or the[6] [Deputy Commissioner (Appeals)][7] [or the Commissioner (Appeals)][8] [or the Commissioner] to be false, or (B) such person offers an explanation which he is[9] [not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his net wealth have been disclosed by him,] then, the amount added or disallowed in computing the net wealth of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the value of the assets in respect of which particulars have been concealed. 1. Clause (i) omitted by Act 3 of 1989, s. 68 (w.e.f. 1-4-1989). Earlier it was substituted by Act 41 of 1975, s. 91 (w.e.f. 1-4-1976). 2. Subs. by s. 68, ibid ., for clause (ii) (w.e.f. 1-4-1989). Earlier it was substituted by Act 41 of 1975, s. 91 (w.e.f. 1-4-1976). 3. Subs. by Act 41 of 1975, s. 91, for clause (iii) and the Explanations (w.e.f. 1-4-1975). Earlier clause (iii) and the Explanations were substituted by Act 19 of 1968, s. 32 (w.e.f. 1-4-1968). 4. Subs. by Act 3 of 1989, s. 68, for the proviso (w.e.f. 1-4-1989). Earlier it was inserted by Act 46 of 1986, s. 33 (w.e.f. 10-9-1986). 5. Subs. by Act 4 of 1988, s. 127, for "Wealth-tax Officer" (w.e.f. 1-4-1988). 8. Subs. by Act 32 of 1971, s. 31, for "after the 31st day of March, 1964" (w.e.f. 1-4-1972). 9. Ins. by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 1[(b) of an assessee who is a partner in a firm or a member of an association of persons (not being a co-operative housing society), there shall be included, as belonging to that assessee, the value of his[2] [interest in the assets of the firm] or association determined in the manner laid down in Schedule III: 3[Provided that where a minor is admitted to the benefits of partnership in a firm, the value of the interest of such minor in the firm, determined in the manner specified above, shall be included in the net wealth of the parent of the minor, so far as may be, in accordance with the provisions of the third proviso to clause (a).]] 6. Subs. by s. 127, ibid., for "Appellate Assistant Commissioner" (w.e.f. 1-4-1988). 7. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 8. Ins. by Act 20 of 2002, s. 110 (w.e.f. 1-6-2002). 9. Subs. by Act 46 of 1986, s. 33, for "not able to substantiate" (w.e.f. 10-9-1986). * * 1* * * 2[ Explanation 3. —Where any person 3* fails, without reasonable cause, to furnish within the period specified in sub-section (1) of section 17A, a return of his net wealth which he is required to furnish under section 14 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under clause (i) of sub-section (4) of section 16 or sub-section (1) of section 17 and the Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has assessable net wealth, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his assets or furnished inaccurate particulars of any assets or debts in respect of such assessment year, notwithstanding that such person furnishes a return of his net wealth at any time after the expiry of either of the periods aforesaid applicable to him in pursuance of a notice under section 17.] 4[(1A) Where, in the case of an individual being a member of a Hindu undivided family, any property having been the separate property of the individual has, at any time after the 31st day of December, 1969, been converted by the individual into property belonging to the family through the act of impressing such separate property with the character of property belonging to the family or throwing it[5] [into the common stock of the family or been transferred by the individual, directly or indirectly, to the family otherwise than for adequate consideration (the property so converted or transferred being hereinafter referred to as the converted property)], then, notwithstanding anything contained in any other provision of this Act or in any other law for the time being in force, for the purpose of computing the net wealth of the individual under this Act for any assessment year commencing on or after the 1st day of April, 1972,— (a) the individual shall be deemed to have transferred the converted property, through the family, to the members of the family for being held by them jointly ; (b) the converted property or any part thereof[6] * shall be deemed to be assets belonging to the individual and not to the family ; Explanation 4. —Where the value of any asset returned by any person is less than seventy per cent. of the value of such asset as determined in an assessment under section 16 or section 17, such person shall be deemed to have furnished inaccurate particulars of such asset within the meaning of clause (c) of this sub-section, unless he proves that the value of the asset as returned by him is the correct value.] 4[ Explanation 5. —Where in the course of a search under section 37A, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets represent or form part of his net wealth,— (a) on any valuation date falling before the date of the search, but the return in respect of the net wealth on such date has not been furnished before the date of the search or, where such return has been furnished before the said date, such assets have not been declared in such return; or (b) on any valuation date falling on or after the date of the search, then, notwithstanding that such assets are declared by him in any return of net wealth furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause ( c sub-section (1) of this section, be deemed to have concealed the particulars of such assets or furnished inaccurate particulars of such assets,[5] [unless— 7 [(c) where the converted property has been the subject-matter of a partition (whether partial or total) amongst the members of the family, the converted property or any part thereof which is received by the spouse[8] * of the individual on such partition shall be deemed to be assets transferred indirectly by the individual to the spouse[8] * and the provisions of sub-section (1) shall, so far as may be, apply accordingly:] Provided that the property referred to in clause (b) or clause (c) shall, on being included in the net wealth of the individual, be excluded from the net wealth of the family or, as the case may be, the spouse[8] * of the individual.] 9* * * * * 10* * * * * (4) Nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to therein made by an individual before the 1st day of April, 1956, and the value of any assets so transferred shall not be included in the computation of his net wealth. 1. Subs. by Act 3 of 1989, s. 59, for clause (b) (w.e.f. 1-4-1989). Earlier it was amended by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). 2. Subs. by Act 18 of 1992, s. 91, for "interest in the firm" (w.e.f. 1-4-1993). 3. Subs. by s. 91, ibid., for the proviso (w.e.f. 1-4-1993). 4. Ins. by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of (1) such assets are recorded,— - (i) in a case falling under clause (a), before the date of the search; and (ii) in a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him or such assets are otherwise disclosed to the[6] [Chief Commissioner or Commissioner] before the said date; or (2) he, in the course of the search, makes a statement under sub-section (4) of section 37A that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, forms part of his net wealth which has not been disclosed so far in his return of net wealth to be furnished before the expiry of the time specified in sub-section (1) of section 14, and also specifies in the statement the manner in which such net wealth has been acquired and pays the tax, together with interest, if any, in respect of such net wealth].] 1. The proviso omitted by Act 46 of 1986, s. 33 (w.e.f. 10-9-1986). 2. Subs. by Act 3 of 1989, s. 68, for Explanation 3 (w.e.f. 1-4-1989). 3. The words "who has not previously been assessed under this Act" omitted by Act 20 of 2002, s. 110 (w.e.f. 1-4-2003). 4. Ins. by Act 67 of 1984, s. 57 (w.e.f. 1-10-1984). 5. Subs. by Act 46 of 1986, s. 33, for certain words (w.e.f. 10-9-1986). 5. Subs. by Act 21 of 1979, s. 23, for "into the common stock of the family (such property being hereinafter referred to as the converted property)" (w.e.f. 1-4-1980). 6. The words ", in so far as it is attributable to the interest of the individual in the property of the family," omitted by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 7. Subs. by s. 82, ibid ., for clause (c) (w.e.f. 1-4-1976). 8. The words "or minor child" omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). 9. Sub-section (2) omitted by Act 3 of 1989, s. 59 (w.e.f. 1-4-1989). 10. Sub-section (3) omitted by Act 18 of 1992, s. 91 (w.e.f. 1-4-1993). Earlier it was amended by Act 21 of 1979, s. 23 (w.e.f. 1-4-1980) and Act 25 of 1975, s. 26 (w.e.f. 1-4-1975), 1[(4A) Notwithstanding anything in sub-section (4), nothing contained in clause (a) of sub-section (1) shall apply to any such transfer as is referred to therein made before the 1st day of April, 1963, by an individual who but for the extension of this Act to the Union territories of Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry, would not have been an assessee, and the value of any assets so transferred shall not be included in the computation of his net wealth.] (5) The value of any assets transferred under an irrevocable transfer shall be liable to be included in computing the net wealth of the transferor as and when the power to revoke arises to him. 6. Subs. by Act 4 of 1988, s. 127, for "Commissioner" (w.e.f. 1-4-1988). 1[ Explanation 6. —Where any adjustment is made in the wealth declared in the return under the proviso to clause (a) of sub-section (1) of section 16 and additional wealth-tax charged under that section, the provisions of this sub-section shall not apply in relation to the adjustments so made.] 2[(1A) Where any amount is added or disallowed in computing the net wealth of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c).] (2) No order shall be made under sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard. 3* * * * * 4[(3) No order imposing a penalty under sub-section (1) shall be made,— (i) by the Income-tax Officer, where the penalty exceeds ten thousand rupees; (ii) by the[5] [Assistant Commissioner or Deputy Commissioner], where the penalty exceeds twenty thousand rupees, except with the prior approval of the[6] [Joint Commissioner].] 7* * * * * 2[(5A) Where a gift of money from one person to another is made by means of entries in the books of account maintained by the person making the gift or by an individual or a Hindu undivided family or a firm or an association of persons or body of individuals with whom or which he has business or other relationship, the value of such gift shall be liable to be included in computing the net wealth of the person making the gift unless he proves to the satisfaction of the[3] [Assessing Officer] that the money has actually been delivered to the other person at the time the entries were made.] 4[(6) For the purposes of this Act, the holder of an impartible estate shall be deemed to be the individual owner of all the properties comprised in the estate. (4) A[8] [Deputy Commissioner (Appeals)],[9] [a Commissioner (Appeals),] a[10] [Chief Commissioner or Commissioner] or the Appellate Tribunal on making an order under this section imposing a penalty, shall forthwith send a copy of the same to the[11] [Assessing Officer.] 12[(5) No order imposing a penalty under this section shall be passed— (i) in a case where the assessment to which the proceedings for imposition of penalty relate is the subject-matter of an appeal to the Deputy Commissioner (Appeals) or the Commissioner (Appeals) under section 23 or an appeal to the Appellate Tribunal under sub-section (2) of section 24, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever is later ; (ii) in a case where the relevant assessment is the subject-matter of revision under sub-section (2) of section 25, after the expiry of six months from the end of the month in which such order of revision is passed; 1. Ins. by Act 3 of 1989, s. 68 (w.e.f. 1-4-1989). 5[(7) Where the assessee is a member of a co-operative society, company or other association of persons and a building or part thereof is allotted or leased to him under a house building scheme of the society, company or association, as the case may be, the assessee shall, notwithstanding anything contained in this Act or any other law for the time being in force, be deemed to be the owner of such building or part and the value of such building or part, shall be included in computing the net wealth of the assessee; and, in determining the value of such building or part, the value of any outstanding instalments of the amount payable under such scheme by the assessee to the society, company or association towards the cost of such building or part and the land appurtenant thereto shall, whether the amount so payable is described as such or in any other manner in such scheme, be deducted as a debt owed by him in relation to such building or part. (8) A person— (a) who is allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); 2. Ins. by Act 18 of 2008, s. 62 (w.r.e.f. 1-4-1989). Earlier sub-section (1) was inserted by Act 32 of 1971, s. 33 (w.e.f. 1-4-1972) which was later omitted by Act 41 of 1975, s. 91 (w.e.f. 1-4-1976). 3. Sub-sections (2A) and (2B) omitted by Act 41 of 1975, s. 91 (w.e.f. 1-4-1976). Earlier these sub-sections were inserted by Act 15 of 1965, s. 20 (w.e.f. 11-9-1965). 4. Subs. by Act 3 of 1989, s. 68, for sub-section (3) (w.e.f. 1-4-1989). 5. Subs. by Act 21 of 1998, s. 66, for "Assistant Commissioner" (w.e.f. 1-10-1998). 6. Subs. by s. 66, ibid . for "Deputy Commissioner" (w.e.f. 1-10-1998). 7. Sub-section (3A) omitted by Act 3 of 1989, s. 68 (w.e.f. 1-4-989). 8. Subs. by Act 4 of 1988, s. 127, for "Appellate Assistant Commissioner" (w.e.f. 1-4-1988). 9. Ins. by Act 29 of 1977, s. 39 and the Fifth Schedule (w.e.f. 10-7-1978). 10. Subs. by Act 4 of 1988, s. 127, for "Commissioner" (w.e.f. 1-4-1988). 11. Subs. by s. 127, ibid., for "Wealth-tax Officer" (w.e.f. 1-4-1988). 12. Subs. by Act 3 of 1989, s. 68, for sub-section (5) (w.e.f. 1-4-1989). (iii) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. (b) who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof by virtue of any such transaction as is referred to in clause (f) of section 269UA of the Income-tax Act, 1961 (43 of 1961), shall be deemed to be the owner of that building or part thereof and the value of such building or part shall be included in computing the net wealth of such person.] Explanation. —For the purposes of this section,— (a) the expression "transfer" includes any disposition, settlement, trust, covenant, agreement or arrangement;[6] * 2 [(aa) the expression "child" includes a step-child and an adopted child;] 1. Ins. by The Taxation Laws (Extension to Union Territories) Regulation, 1963 (3 of 1963), s. 3 and the Schedule (w.e.f. 1-4-1963). 2. Ins. by Act 41 of 1975, s. 82 (w.e.f. 1-4-1976). 3. Subs. by Act 4 of 1988, s. 127, for "Wealth-tax Officer" (w.e.f. 1-4-1988). 4. Subs. by Act 46 of 1964, s. 4, for the Explanation (w.e.f. 1-4-1965). 5. Subs. by Act 33 of 1996, s. 57, for sub-section (7) (w.e.f. 1-4-1997). Earlier sub-section (7) was inserted by Act 32 of 1971, s. 31 (w.e.f. 1-4-1972). Explanation. —In computing the period of limitation for the purposes of this section,— (i) any period during which the immunity granted under section 22H remained in force; (ii) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 39; and (iii) any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of any court, shall be excluded. (6) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1989 (3 of 1989) shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.]