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TMI Blog1989 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... t this information although it is not known when. On the basis of the above mentioned information the ITO recorded the following reason for each of these two assessment years in the respective order sheet: "73-74/20.6.75 The police authorities seized gold weighing 150 totals 20 totals on 5th April, 1972 and 15th Nov., 1973 respectively. Its value estimated at Rs. one lakh represents the undisclosed income of the A which has escaped assessment. Action under s. 147(a) has, therefore, been taken". For 74-75 Gold weighing 20 totals was seized by the police. Its costs estimated at Rs. 10,000 has escaped assessment. Notice under s. 147 (a) has, therefore, been issued. Thereafter, as mentioned in the assessment orders themselves although the assessments were completed under s. 144 on 31st March, 1980, both were re-opened under s. 146 on 29th April, 1980. Both were again completed on 15th March, 1983 under s. 144 and both were again re-opened under s. 146 on 21st March, 1983. Finally both the assessments were again completed on 15th Jan., 1985. The assessment for the asst. yr. 1973-74 was completed on a total income of Rs. 1,24,050 against the originally assessed income at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed had relied on Gauhali High Court decision in JAI PRAKASH SINGH vs. CIT 1977 CTR (Gau) 232 : (1978) 111 ITR 507 (Gau) so also on two ITAT decisions reported as PURANCHAND LAXMICHAND vs. ITO (1986) 16 ITD 126 (Del) and WTO vs. GHREHARAN SINGH (1984) 19 TTJ 185 (Chd), the learned CIT(A) rejected these decisions merely by observing that decisions in these cases rested on the facts mentioned and prevailing in those cases and that in none of those cases the nature of transactions was the same as was obtaining in the case before him but did not point out how those facts differed and how the ratio of High Court decision was not applicable in the facts and circumstances of assessee s case. 4. In the appeal before us, the assessee has again challenged the validity of issue of notice under s. 148/147 (a), completion of re-assessment proceedings without proper justification so also without proper service of notices on all the legal heirs and has also challenged the various additions made to the originally assessed income of the assessee, on merits. However, the learned Departmental Representative referred us to the decision of the Hon ble Rajasthan High Court in PREM AGENCIES vs. CIT (198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l further argued that the parties being mentioned in the assessment order were not the assessee. Moreover, even the authenticity of the statements of those persons was doubtful. In fact, the ITO has conceded in the assessment orders that even the summons could not be served on those two persons. So far as the question of Radha Ballabh and Ramgopal, the persons from whom 150 tolas and 20 tolas of gold respectively was seized are concerned, the Customs Authorities had issued show cause notices to them but the department has not mentioned nor disclosed to the assessee as to what happened to the first man regarding 150 tolas. He submitted that no show cause notice appears to have been issued to late Shri Jagannath Sharma in respect of either of these two quantities of gold, namely, 150 tolas and 20 tolas from Gold Control Authorities. He submitted that if the Gold Control Authorities had been satisfied that Ram Gopal Pareek had purchased the gold from late Jagannath Sharma, they should have proceeded against the assessee also, which they did not. In these circumstances, according to the learned counsel the reasons recorded by the ITO are no reasons at all in the eye of law. Regarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his ground also the additions could not be sustained in view of the decision of the Hon ble Supreme Court reported at KISHEN CHAND CHELLARAM vs. CIT (1980) 19 CTR (SC) 360 : (1980) 125 ITR 713 (SC) and PONUKAN TADERS vs. ADDL. CIT (1972) 83 ITR 508 (Ker). 8. Lastly, the learned counsel argued that even if none of the above mentioned arguments of the assessee is accepted, since the entire gold had been confiscated, in view of the decision of the Hon ble Supreme Court in the case of CIT vs. PIARA SINGH (1980) 17 CTR (SC) 111 : (1980) 124 ITR 40 (SC), so also CIT vs. SHRI RAMCHANDER (1985) 49 CTR (P H) 164 : (1986) 159 ITR 689 (P H) and 179 ITR 27, it should be allowed as a loss to the assessee. He further requested us to direct the learned CIT(A) to decide all the grounds of appeal taken before him rather than deciding assessee s appeal only on two points and restoring the cases back to the ITO. 9. The learned Departmental Representative, on the other hand, argued that the sufficiency of the reasons recorded by the ITO was not justiciable in view of decisions of the Hon ble Supreme Court in S. NARAYANAPPA ORS. vs. CIT (1967) 63 ITR 219 (SC), VIMAL CHAND GOLECHA vs. ITO (1981) 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made investments in 20 tolas of gold which had been seized by police authorities and although these 20 tolas of gold were covered for initiating proceedings for the asst. yr. 1973-74, the ITO took the same quantity for the asst. yr. 1974-75 also as a measure of abundant precaution lest this amount may escape assessment if finally it is held that assessment has to be made on the basis of accounting year of the assessee, which in this case was to end in Dewali, 1973. The facts show that at that point of time there was nothing on record with the ITO to make him form an opinion that income in respect of 380 tolas of gold has escaped assessment. The only basis which he had was regarding 20 tolas of gold and since this was recovered and was stated to have been sold by late Jagannath Sharma on 15th Nov., 1972, this would be relevant only for the asst. yr. 1973-74 whether it is covered by the department under s. 69 or 69A or even 69B or 69C of the IT Act. Since the very basis for which the proceeding under s. 148 for the asst. yr. 1974-75 were taken did not exist, in our opinion the ITO did not assume the jurisdiction to issue notice under s. 147(A) for asst yr. 1974-75. For this proposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter to the file of the ITO with specific directions in this regard and hence this matter has to be decided by the ITO after giving the assessee fresh opportunity of being heard so also of confronting with the evidence which the department has collected against the assessee for framing the assessment order. 14. So far as the question of allowing the loss of gold to the assessee in view of the decision of the Hon ble Supreme Court in the case of PIARA SINGH, since the quantum of assessment has to be decided by the assessing officer afresh, no directions are being given in this regard and the question has to be decided by the Assessing Officer on merits and according to law. 15. Regarding the other Grounds of Appeal, we have already expressed the opinion that in view of the decision of the Hon ble Rajasthan High Court reported in (1988) 173 ITR 110 (Raj) since these issues have not been decided by the First Appellate Authority, we are not deciding the issues as the matter has been restored to the file of the assessing officer. 16. Accordingly, while appeal for the asst. yr. 1973-74 is rejected, the appeal for the asst. yr. 1974-75 is allowed. - - TaxTMI - TMITax - Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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