9911796707
TMI Blog1993 (8) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... filed wealth-tax return on 8-4-1983 admitting a net wealth of Rs. (-) 4,08,500. As per the assessment order dated 30-3-1985, the net wealth was determined at Rs. 34,08,080. This assessment order was set aside by the Commissioner of Income-tax (Appeals) on 13-2-1987. The set aside assessment was completed on 31-3-1987 determining the net wealth of the assessee at Rs. 37,93,770 which was reduced by the Commissioner of Income-tax (Appeals) to Rs. 14,87,140. 4. In the course of the income-tax proceedings of the assessee it was observed that by way of professional remuneration for acting as Hero in the feature film 'Superman', as per the evidence recorded from the film producer, Shri R. Gopal of M/s. Lakshmi Vishnu Production, the assessee was said to have been paid the following amounts : 14-1-1978 : Rs. 1,00,000 16-8-1979 : Rs. 2,00,000 Sept. 1979 : Rs. 1,00,000 Oct. 1979 : Rs. 1,00,000 2-11-1979 : Rs. 1,00,000 26-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment years namely, 31-3-1979 and 31-3-1980 and no unexplained cash or unexplained asset was found by the Department as such. This establishes that no addition as proposed by the learned Commissioner of Wealth-tax is warranted under the circumstances. No wealth-tax shall be chargeable on any fictitious or imaginary assets. It was, therefore, requested to drop the revisionary proceedings. The Commissioner of Wealth-tax did not accept the contentions of the assessee and after affording reasonable opportunity to the assessee's counsel to make his submissions, the learned Commissioner of Wealth-tax had passed his revisionary order dated 21-3-1991 rejecting both the broad contentions which arose from the reply filed by the assessee. The learned Commissioner of Wealth-tax had recorded the finding in his order as follows : "Neither in the original wealth- tax assessments made on 28-2-1984 and 30-3-1985 respectively for the assessment years 1979-80 and 1980-81 nor in the fresh assessments made on 31-3-1989 for these two years, any inclusion was made in respect of the amounts received by the assessee by way of professional remuneration for acting in the film 'Superman', to the total exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. The learned Commissioner of Wealth-tax held that the matter regarding inclusion in the net wealth of the assessee any professional remuneration received in respect of his acting in the film 'Superman' was never subject-matter of an appeal before the Commissioner of Wealth-tax (Appeals) in wealth-tax proceedings of the assessee and accordingly, there was no scope to consider this matter in the appeal preferred before the Commissioner of Wealth-tax (Appeals). Thus he is duly vested with jurisdiction under section 25(2) of the Wealth-tax Act. 6. Regarding the merits of the appeal, the learned Commissioner of Wealth-tax held that the income-tax assessment of the assessee for assessment year 1979-80 was reopened under section 147(a) of the Income-tax Act and in the course of the said proceedings, a survey was conducted at the premises of the film producer, Shri R. Gopal of M/s. Lakshmi Vishnu Productions on 1-11-1980 and certain diaries, papers and vouchers were seized in the said survey. Shri Gopal was also examined about large sums noted as payments made to film art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal to the ITAT against the impugned appellate orders dated 28-9-1990, inter alia, on the ground that the learned Commissioner of Income-tax (Appeals) had not gone into the merits of the quantum addition made for both the assessment years. According to the learned Commissioner of Wealth-tax, all the above material brought out would clearly establish the total receipt of Rs. 6,60,000 by the assessee for his acting in the film 'Superman'. Thus the contention of the assessee that search took place in the assessee's premises on 9-12-1980 and that no cash or valuables were found at that time and, therefore, no addition could be made in respect of net wealth as on valuation dates 31-3-1979 and 31-3-1980 cannot be accepted. The learned Commissioner of Wealth-tax held that search took place long after the relevant valuation dates and the mere fact that no cash or unexplained asset was available at the time of search was not per se established that the impugned cash was not available on the relevant valuation dates. The learned Commissioner of Wealth-tax in the penultimate para held the following : "Accordingly in the light of the materials gathered as a sequal to the action under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and 1980-81 were not taken up in revision, the subject-matter of revision being fresh assessment dated 31-3-1989. As already stated, the learned Commissioner of Wealth-tax had sent a letter dated 27-2-1991 calling upon the assessee to file his objections for taking up revision of wealth-tax assessments for 1979-80 and 1980-81. In that letter it is categorically noted at the close of para 3 as follows : "Therefore, the assessment orders passed under section 16(3) dated 31-3-1989 for both the years are erroneous and are prejudicial to the interests of the revenue. I, therefore, propose to revise the assessments by invoking the provisions of section 25(2) of the Wealth-tax Act." Therefore, in view of the above notice, there is no scope to doubt as to whether the original assessment orders dated 22-8-1984 and 30-3-1985 or the fresh assessment orders dated 31-3-1989 which were taken up for revision. The argument that the original assessments dated 28-2-1984 and 30-3-1985 are only amenable for revisionary jurisdiction as two years from the date of those assessments were already elapsed, revisional jurisdiction is barred by time under section 263(2) of the Income-tax Act is an argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d decided by the Appellate Assistant Commissioner. Matters which are not covered by the appellate order are left untouched and to that extent, the Income-tax Officer's assessment order survives permitting exercise of revisional jurisdiction by the Commissioner under section 263 of the Act." The opposite view was that the entire order passed by the Assessing Officer merged in the first appellate order and no part of it can be subjected to revision under section 263(1) of the Income-tax Act and 25(2) of the Wealth-tax Act irrespective of the points urged by the party or decided by the appellate authority [see J.K. Synthetics Ltd. v. Addl. CIT [1976] 105 ITR 344 (All.), Remex Constructions/Remex Electricals v. First ITO [1987] 166 ITR 18 (Bom.) and M.S.P. Spices (P.) Ltd. v. CIT [1991] 188 ITR 491, 494 (Kar.)]. However, after 1-6-1988, there is no scope for any such conflict to continue because on 1-6-1988, Explanation (c) to sub-section (2) to section 25 of the Wealth-tax Act was substituted by Finance Act, 1988 with effect from 1-6-1988 and it reads as follows : "(c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject-matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal assessment which may be subject to revision under section 25(1) is quite different from the fresh assessment order covered by Explanation (c) to section 25(2). The former deals with the original assessment order simpliciter and the latter contemplates an assessment in which the order is partially merged. So the argument that even after the appellate order is merged with the original assessment order, it is the original assessment order which is amenable to revisional jurisdiction, but not the assessment order in which the appellate order partially merged (31-3-1989) is in utter disregard of the clear and unambiguous provisions of Explanation (c) to section 25(2) of the Wealth-tax Act and hence such an argument cannot be countenanced or upheld. Following decisions were relied upon by the assessee in support of his contention: (1) CIT v. Jawaharlal Nagpal [1988] 171 ITR 136 (MP); (2) Pulipati Subbarao Co. v. AAC [1959] 35 ITR 673 (AP); (3) CIT v. Bandaru Sanyasi Raju [1981] 127 ITR 453 (AP); (4) CIT v. S. V. Divakar [1993] 201 ITR 914 (Ori.). We went through those decisions and they are all distinguishable for one reason or the other which we are going to discuss pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the direction thus given which was answered in the affirmative. In the last of the cases cited, namely, S.V. Divakar's case the point decided was that while making fresh assessment in pursuance of the first appellate authority's order, the Income-tax Officer cannot consider new sources of income. It may be observed that none of the decisions cited on behalf of the assessee dealt with the powers of the Commissioner for revision. The position under law that assessing authority while making fresh assessments on the appeal being disposed of by the first appellate authority may not be having suo motu powers of adding new sources of income which is neither here nor there. The question is whether the fresh assessment made by the Income-tax Officer can be the subject-matter of revision and if so to what extent. This question is altogether different from the question whether the Income-tax Officer has suo motu powers of adding new sources for making fresh assessment. Further in S. V. Divakar's case powers to revise such fresh assessment was accepted by the Orissa High Court. In the penultimate para of the judgment the Orissa High Court held the following: "To put in short, the scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 25(2) of the Wealth-tax Act. 12. The next question which falls for consideration would be as to how far the learned Commissioner of Wealth-tax is justifiable to direct the Wealth-tax Officer to tax Rs. 1 lakh as part of wealth of the assessee for the assessment year 1979-80 and Rs. 6,60,000 as part of his wealth for the assessment year 1980-81. Are there any justifiable reason to order these two additions or is it a case where learned Commissioner of Wealth-tax while revising the assessment orders should have directed further enquiry to be made into the question of payment of on money to the assessee for his role in 'Superman' and decide the quantum of addition if any to be made in his hands as part of his wealth for assessment years 1979-80 and 1980-81 respectively, on such enquiries and after determining the question as per law after giving due opportunity to the assessee to make his submissions in that regard. The learned Commissioner of Wealth-tax had taken certain evidence as conclusive against the assessee and he deduced that it is lawful for him to infer that the assessee had derived Rs. 6,60,000 as remuneration for his role in 'Superman'. However, he forgot to note th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises of Lakshmi Vishnu Productions of Sri R. Gopal on 1-11-1980. (2) Evidence recorded from Shri R. Gopal on 24-11-1982, 19-4-1983 and 17-3-1984. It is no doubt true that he was permitted to be cross examined by the learned advocate for the assessee. (3) Assessment record of the assessee for assessment year 1981-82, a copy of which is given at pages 45 to 76 of the paper compilation filed before this Tribunal. So also the examination recorded from Shri R. Gopal was also provided to the Tribunal. It would appear that a sum of Rs. 6,45,000 was sought to be included as part of the wealth of the assessee for the assessment year 1981-82 on the ground that the method followed by the assessee is to settle his accounts with the film producers on the basis of the dates of release of the pictures. It is the contention of the revenue that release of the picture 'Superman' took place in the accounting year relevant to assessment year 1981-82 and so, the sum of Rs. 6,45,000 should be considered as unaccounted receipts of the assessee for his role in that picture and it should be considered as unaccounted for professional receipts of the assessee. 13. The said picture was released on 10- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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