PRATAP CHHAGANLAL JOISHER v. WEALTH-TAX OFFICER
[Citation -1987-LL-0112-3]

Citation 1987-LL-0112-3
Appellant Name PRATAP CHHAGANLAL JOISHER
Respondent Name WEALTH-TAX OFFICER
Court ITAT
Relevant Act Wealth-tax
Date of Order 12/01/1987
Assessment Year 1973-74
Judgment View Judgment
Keyword Tags unexplained jewellery • wealth-tax assessment • original return
Bot Summary: Counsel for the assessee, that merely because a mistake had been committed in showing some jewellery in the return filed at Raichur, the same should not be perpetuated and the assessee did not actually own any jewellery. 12th Oct., 1981, it is found that the residential premises of the assessee were searched under s. 132 of the IT Act on 31st Oct., 1974 during the course of which jewellery worth Rs. 2,52,556 was found from the Bank lockers standing in the name of the assessee, his sister and his wife as well in the bank locker standing in the name of himself and his mother. After considering the relevant facts of the case, it was found by the Tribunal that out of the total jewellery found at Rs. 2,52,556, jewellery to the extent of Rs. 2,12,720 belonged to various relatives of the assessee. Sri Harish contended that the above conclusion of the AAC that jewellery to the extent of Rs. 39,839 had remained unexplained is incorrect and that, in view of the order passed in M.A. No. 24/Bom/1982, the unexplained jewellery was only to the extent of Rs. 9,000. Now, if really the assessee had jewellery as declared in the returns filed upto 1970-71, then he could have claimed benefit while explaining the jewellery found at the search conducted on 30th Oct., 1974. If really the assessee had jewellery of the order declared earlier, certainly he would have taken that fact into account in the income-tax proceedings for 1975-76 here he had a task of explaining the jewellery of the value of Rs. 2,55,000 found in the search. If really there was any jewellery, which the assessee was bound to explain, it could only be the items the aggregate value of which is Rs. 9,000.


BALASUBRAMANYAM, J.M. This is appeal by assessee and it arises out of order passed under s. 18(1)(c). assessment year is 1973-74. assessment was completed under s. 16(3) and in that, addition of Rs. 23,117 was made. This was value of jewellery which had not been shown in return filed. original return had been filed on 27th Jan., 1975. In statement of wealth, jewellery had not been included. revised return was filed on 2nd Jan., 1979, and in that too, no jewellery had been included. It would appear that assessee had been earlier assessed at Raichur (in Karnataka) and in returns filed upto 1970-71, same jewellery had been shown by assessee. assessment proceedings were transferred from Raichur to Bombay in 1972-73, and on basis of earlier record, WTO enquired and ultimately added Rs. 23,117 towards value thereof. Consequent to directions given in assessment, penalty proceedings under s. 18(1)(c) were initiated. To show cause notice issued, assessee gave explanation. It was stated that tax consultant had wrongly shown value of jewellery i n earlier returns filed at Raichur and that there was no jewellery actually belonging to him. jewellery was property of ladies in house and assessee was, in law, not required to declare its value. WTO, for some reasons, rejected explanation and levied penalty of Rs. 46,224. In appeal, levy was confirmed by AAC. Aggrieved by same, assessee has brought this appeal. It was argued by Sri Harish, ld. counsel for assessee, that merely because mistake had been committed in showing some jewellery in return filed at Raichur, same should not be perpetuated and assessee did not actually own any jewellery. order of AAC makes reference to another circumstance. There was search in house of assessee by Revenue Intelligence on 30th Oct., 1974, during course of which jewellery of value of Rs. 2,52,556 was seized. In income-tax proceedings for 1975-76, assessee had to explain possession of said jewellery. explanation of assessee was that jewellery did not belong to him and that it was property of other female inmates in house such as mother, wife, and daughters. ITO accepted explanation in respect of items worth Rs. 9,000 and held that in regard to balance, assessee had not explained. Aggrieved by same, assessee had appealed and CIT(A) reduced addition to Rs. 1,25,000. There were appeals to Tribunal both by assessee and Revenue ITA Nos. 227/Bom/1980 and 457/Bom/1980 which were disposed of by consolidated order passed on 12th Oct., 1981, wherein it was held that addition could be sustained only to extent of Rs. 35,000. assessee had filed Miscellaneous Application in M.A. No. 24/Bom/1982 contending that there were some mistakes apparent on face of record and said application was disposed of on 23rd Aug., 1982. Tribunal found that there were rectifiable mistakes and accordingly passed order holding that assessee's explanation was acceptable substantially and that addition could only be to extent of Rs. 9,000. Dealing with this aspect, AAC remarks: "In support of his statement, he has furnished copy of ITAT's order dt. 12th Oct., 1981 and 23rd Aug., 1982 bearing Nos. 277/Bom/1981 and H.A. No. 198/Bom/82 relating to assessee's income-tax assessment for asst. yr. 1975-76. From Tribunal's order dt. 12th Oct., 1981, it is found that residential premises of assessee were searched under s. 132 of IT Act on 31st Oct., 1974 during course of which jewellery worth Rs. 2,52,556 was found from Bank lockers standing in name of assessee, his sister and his wife as well in bank locker standing in name of himself and his mother. After considering relevant facts of case, it was found by Tribunal that out of total jewellery found at Rs. 2,52,556, jewellery to extent of Rs. 2,12,720 belonged to various relatives of assessee. However, balance amount of Rs. 39,836 i.e. Rs. 2,52,556 Rs. 2,12,720 was found to be unexplained by Tribunal." Sri Harish contended that above conclusion of AAC that jewellery to extent of Rs. 39,839 had remained unexplained is incorrect and that, in view of order passed in M.A. No. 24/Bom/1982, unexplained jewellery was only to extent of Rs. 9,000. This submission is undeniably correct. It was only to extent of Rs. 9,000. This submission is undeniably correct. It was argument of Sri Vohra, ld. Departmental Representative, that assessee did have jewellery as per returns filed at Raichur upto 1970-71 and that there being no evidence with regard to their disposal, there is every justification to think that addition made in wealth-tax assessment for 1973-74 was proper and that this fact cannot be ignored inasmuch as no appeal had been preferred by assessee from assessment passed under s. 16(3) making addition of Rs. 23,117. Now, if really assessee had jewellery as declared in returns filed upto 1970-71, then he could have claimed benefit while explaining jewellery found at search conducted on 30th Oct., 1974. It is fact that assessee had not claimed this while explaining jewellery in assessment proceedings for 19975-76 and this is clear from orders of Tribunal copies of which are in compilation. This is circumstance clear enough to indicate that on account of some mistake presumably on part of tax consultant, that jewellery had been shown in return filed earlier to 1970-71. If really assessee had jewellery of order declared earlier, certainly he would have taken that fact into account in income-tax proceedings for 1975-76 here he had task of explaining jewellery of value of Rs. 2,55,000 found in search. If really there was any jewellery, which assessee was bound to explain, it could only be items aggregate value of which is Rs. 9,000. This position is certain in view of Tribunal's order in M.A. No. 24/Bom/1982 passed in respect of income-tax assessment for 1975-76. jewellery found in search dt. 30th Oct., 1974 is consolidated figure of several items of jewellery. jewellery referable to assessee is not itemised. For all that fact that explanation was not accepted may be owing to difference in valuation and this is also fact or that cannot be altogether lost sight of. WTO passed penalty order in March, 1981 and order of Tribunal in income-tax assessment for 1975-76 were subsequent. Although AAC had advantage of perusing same, he palpably made mistake in saying that jewellery of Rs. 39,836 had remained unexplained while aggregate figure is only Rs. 9,000. As we have already stated, this addition of Rs. 9,000 in income-tax proceedings could at best be brought to valuation difference and jewellery referable to assessee, had not been itemised. In facts and circumstances, it is difficult to suggest that assessee had with design made concealment so as to invite implication of s. 18(1)(c). levy of penalty is not justified and deserves to be cancelled. In result, orders of authorities below are set aside. And penalty is cancelled. appeal stands allowed. *** PRATAP CHHAGANLAL JOISHER v. WEALTH-TAX OFFICER
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