2000 (8) TMI 241 - AT - Wealth-tax

Summary

Issues Involved:
1. Inclusion of value of jewellery in the wealth of the assessee.
2. Ownership of the jewellery found in the locker.
3. Validity of the claim of the jewellery being gifted to the assessee's daughter.
4. Impact of the voluntary disclosure made by the assessee.
5. Requirement of documentary evidence for the gift.
6. Payment of gift-tax.

Issue-wise Detailed Analysis:

1. Inclusion of value of jewellery in the wealth of the assessee:
The primary issue was whether the jewellery found in Locker No. 84 should be included in the wealth of the assessee. The Deputy Commissioner of Wealth-tax (Appeals) included the value of the jewellery in the assessee's wealth, arguing that the jewellery was purchased by the assessee and constituted his wealth. The assessee contended that the jewellery was gifted to his daughter before 1972 and should be excluded from his wealth.

2. Ownership of the jewellery found in the locker:
The jewellery was found in a locker in the name of the assessee's daughter, Miss Amrita Ghosh, at Allahabad Bank, Alipore Branch, Calcutta. The assessee claimed that since his daughter was a major and the jewellery was in her locker, she was the owner. The Deputy Commissioner (Appeals) argued that the investment in the jewellery was made by the assessee, and there was no clear evidence of the gift.

3. Validity of the claim of the jewellery being gifted to the assessee's daughter:
The assessee claimed that the jewellery was gifted to his daughter over the years from 1958 to 1972. The Deputy Commissioner (Appeals) rejected this claim, stating that there was no specific evidence of the gift, such as the date of the gift or payment of gift-tax. The Tribunal had to determine whether the jewellery was indeed gifted to the daughter and whether she was the owner on the valuation dates.

4. Impact of the voluntary disclosure made by the assessee:
The assessee made a disclosure under the Voluntary Disclosure of Income and Wealth Ordinance, 1975, to cover the acquisition of the jewellery. The Deputy Commissioner (Appeals) used this disclosure to justify including the jewellery in the assessee's wealth. The Tribunal considered whether this disclosure affected the ownership claim.

5. Requirement of documentary evidence for the gift:
The Tribunal examined whether the lack of documentary evidence, such as a gift deed or proof of gift-tax payment, invalidated the claim of the jewellery being gifted to the daughter. The Tribunal noted that the gift of movable property could be established through intention and delivery of the property, and the absence of documentary evidence did not necessarily disprove the gift.

6. Payment of gift-tax:
The Deputy Commissioner (Appeals) argued that the absence of gift-tax payment indicated that the jewellery was not gifted. The Tribunal considered whether the payment of gift-tax was a necessary condition for a valid gift. It concluded that the payment of gift-tax was not a condition precedent for a valid gift and that the absence of gift-tax payment did not invalidate the gift.

Separate Judgments Delivered by the Judges:

Judgment by Shri Vimal Gandhi, J.M.:
The Judicial Member held that the jewellery was indeed gifted to the assessee's daughter and should not be included in the assessee's wealth. He emphasized the possession and control of the jewellery by the daughter and the intention of the assessee to gift the jewellery. He directed the Wealth-tax Officer to exclude the value of the jewellery from the assessee's wealth for all the assessment years under appeal.

Judgment by Shri P. Pradhan, A.M.:
The Accountant Member disagreed, stating that the investments in the jewellery were made by the assessee out of his own funds and constituted his wealth. He argued that there was no evidence of the gift and that the voluntary disclosure indicated the assessee held the jewellery until 1975. He supported the inclusion of the jewellery in the assessee's wealth.

Third Member Order by Shri S. Bandyopadhyay, Accountant Member as Third Member:
The Third Member was tasked with resolving the difference of opinion. He considered the facts, including the voluntary disclosure and the affidavits, and concluded that the jewellery was gifted to the daughter. He noted the social and cultural context of the family and the possession and control of the jewellery by the daughter. He held that the jewellery should not be included in the assessee's wealth and answered the question in favor of the assessee.

Conclusion:
The Tribunal ultimately decided that the jewellery should be excluded from the assessee's wealth, accepting the claim that the jewellery was gifted to the daughter. The appeals were allowed in favor of the assessee.