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TMI Blog1984 (3) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... he acquisition of jewellery and silver utensils. The assessee then filed a reply stating that she had received ornaments and silver utensils at the time of her marriage in the year 1963 from her parents, in-laws and relatives and that no jewellery was acquired during the year under appeal. The WTO observed in the wealth-tax assessment as follows: "Assessment is, therefore, being completed without prejudice to the outcome of enquiries to be done with regard to the source of acquisition of jewellery etc., in the income-tax proceedings for the asst. yr. 1964-65". 2. Then, the ITO initiated proceedings under s. 147(a) read with s. 148 for the year under appeal after recording the reasons, which have been reproduced in the reassessment order b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edge of the fact that the assessee had possessed jewellery, silver utensils, etc. worth Rs. 42,000 before making the original income-tax assessment and that no new fact necessary for making the assessment has come to his knowledge after the completion of the original assessment. He, therefore, cancelled the reassessment order without going into the merits of acquisition of the assets holding that the initiation of the reassessment proceedings was invalid. 4. Aggrieved, the Revenue has come up in appeal to the Tribunal. Shri Saxena, ld. Departmental Representative and Shri J.K. Ranka ld. counsel for the assessee argued the case at length. In my opinion the view taken by the AAC deserves to be upheld. The first question for consideration is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter would not have had the knowledge of the fact that the assessee had possessed jewellery, etc. I do not see any force in this argument. The wealth-tax return ordinarily should have reached the ITO soon-after it was filed and it is not credible that the wealth-tax return filed on 7th Sept., 1974 would not have reached the ITO before 13th Sept., 1974 when he made the original assessment order. 5. Almost similar facts were involved in the case of Smt. Savitri Devi Jhunjhunwala (1979) 1 Taxman 79 (Cal. Trib), which has been relied on by Shri Ranka. In this case, there was search on 20th Feb., 1965 in the premises of Shri Premraj Daulatram in the course of which the Department recovered silver coins/bricks and gold guineas/ornaments. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal took the view that after having made the original assessment, when all the facts were there it cannot lie for an ITO to say that there was failure to disclose the necessary facts on the part of the assessee. Also, it was observed that there is no obligation on the part of the assessee to disclose her wealth specially the gold and jewellery in this case while filing her income-tax return. It continued to observe in para 9 that the determination of income of an assessee does not depend upon the jewellery he or she possesses. It is for the ITO to draw an inference or get an explanation from the assessee as to how the assessee possessed gold and jewellery and then decide the question as to how the assessee possessed gold and jewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee was called upon during the wealth-tax proceedings to prove the acquisition of the jewellery etc., and that no plausible material to prove the acquisition was then filed and, therefore, the ITO had reason to believe that unexplained investment in the jewellery was the income of the assessee from undisclosed sources. From the wealth-tax order, it is clear that the WTO had not reached the conclusion that acquisition of jewellery etc. was not proved, rather he clearly observed that the order was without prejudice to the outcome of enquiries to be made. From the reasons recorded by the ITO, it clearly appears that no further enquiry was made as was to be made according to the WTO. No enquiry was concluded in the wealth-tax proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... custom could have received jewellery etc., from her parents, in-laws and relatives and, on the other hand, no material is there for the ITO to rebut such evidence. On these facts, I am of the view that the ITO could not have reason to believe that the entire jewellery, silver untensils, etc. were acquired by her during the year. For the purpose of s. 147(a), there should be reason to believe and not mere pretence or garb of reason. In the instant case, what I find is that there was no reason to believe that the jewellery etc. was acquired by the assessee during the year under appeal, but merely on a pretence without any adequate material, the ITO initiated proceedings under s. 147(a), which in my opinion are not at all sustainable. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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