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TMI Blog1983 (6) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... he CWT(A) while fixing the value of the jewellery as indicated above observed that for the asst. yr. 1977-78 the assessee had adopted the value of the jewellery at Rs. 2,09,525 on the basis of valuation report for March, 1975. According to her, there was increase in the value of the jewellery from March, 1975 to 31st March, 1977, 31st March, 1978, 31st March, 1979 and 31st March, 1980, the valuation rates relevant to the four assessment years under appeal. The claim before the CWT(A) was that there was no increase in the value of the jewellery which was studded with precious stones and had very little gold content. In support of this contention, the assessee produced before the CWT(A) valuation and appraisal of diamonds, emeralds, rubies, sapphires and gold and silver jewellery pamphlet issued by the Gem and Jewellery Export Promotion Council, Bombay. A perusal of this pamphlet supplied by the assessee showed the increase in the value of the jewellery as compared to 31st March, 1975 as under: Items % increase as on . . . . 31-3-1977 31-3-1978 31-3-1979 31-3-1980 Small ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the value for the asst. yrs. 1977-78 and 1978-79 for sound reasons taking into consideration the increase in the value of the jewellery as supplied by the Gem Jewellery Export Promotion Council, Bombay. Value fixed for the asst. yr. 1980-81, in our opinion, is also reasonable and no interference with the same is called for. However, the value fixed by her for the asst. yr. 1979-80 at Rs. 3,37,300 in our opinion, is a little on the high side. In our opinion, it would meet the ends of justice if the value of the jewellery for this year is adopted at Rs. 3 lakhs. The assessee will be entitled to relief of Rs. 37,300 on this account for this year. 4. The second ground of appeal which is again common for all the four assessment years is against inclusion of interest of Rs. 41,750 for each of the asst. yrs. 1977-78 to 1979-80 and of Rs. 2,06,250 for the asst. yr. 1980-81 in the net wealth of the assessee. The assessee advanced loans to Princes Trivikama Kumari and to Golden Son Cinema Theatre. Accrued interest income from these loans has not been shown in the income and expenditure account. It was stated before the ITO that no interest had been received from the above parties. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t within the meaning of s. 2(c) of the WT Act, 1957. The matter, however, does not end here. It has to be considered in the light of the provisions contained in s. 7(2)(c) of the WT Act. We also agree with Shri Koolwal that a plain reading of the aforesaid section reveals that these provisions are applicable only in cases of assessees carrying on the business for which accounts are maintained regularly. But the Karnataka High Court in the case of A.T. Mirji observed as under: "This is the view expressed by the Full Bench of the Allahabad High Court on the interpretation of s. 13 of the 1922 Act in CIT vs. Smt. Singhari Bai, 12 ITR 224, 239". "I read that as meaning, if I have understood the case rightly that it is the method of accounting regularly employed by the assessee himself that the ITO is bound to take as the basis for computing true income-tax figure according to that method, then it is open to the ITO to make any adjustment that is necessary for the purpose of giving full and true effect of the method itself". "The above reasoning equally applies to this case in view of s. 7(2)(a) of the Act. In the present case, there was no reason for disregarding the cash system ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s material. Therefore, in our view whether the assessee is carrying on the business or profession or deriving income from other sources, if he has maintained accounts regularly, system of accounting adopted should be normally accepted for computing the value of the assets on the valuation date. It is a common ground between the parties that the assessee is regularly maintaining books of account for income from other sources and, therefore, in our view, there is no basis for the Revenue not to accept the accounting system regularly employed by the assessee. In such circumstances, we are unable to sustain the orders of the authorities below and direct the WTO to exclude the deemed interest included in the net wealth for all the four assessment years. 9. We would also like to add that whether in view of the provisions contained in r. 2C of the WT Rules, 1957, it could be said that the WTO was not competent to make adjustment in respect of assets not disclosed in the balance sheet, this point has already been answered by the Tribunal, Bombay Bench D (Special Bench) in the case of Shri N.M. Saha vs. 2nd WTO (1981) 1 ITD 244 (Bom) (SC). In para 30 of the above order, the Bench observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year 1976-77 and there was no change in these vehicles thereafter. Shri Ranka did not controvert the same. He, however, pleaded that there being old models, their value was below Rs. 30,000 provided under s. 5(1)(viii) and, therefore, they were not includible. The WTO, determined their value at Rs. 50,000 Rs. 48,000 Rs. 46,000 and Rs. 42,000 respectively, for the respective assessment years under appeal. After allowing statutory exemption to the extent of Rs. 30,000 the balance of Rs. 20,000, Rs. 18,000, Rs. 16,000 and Rs. 12,000 respectively were included in the net wealth of the assessee. The CWT(A) has upheld the additions. Shri Ranka maintained that the value assessed by the authorities below was excessive keeping in view the fact that the assets were old. We have already pointed out earlier that one of the vehicles is a mercedes car another one an Indian car for the third one a jeep. It is a common knowledge that there has been appreciation in the values of motor vehicles year after year. Taking into consideration the appreciation in values as well as depreciation on account of normal wear and tear, the value fixed by the authorities below cannot be said to be excessive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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