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TMI Blog1987 (2) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... of above order on 20-3-1980. The Assistant Controller commenced proceedings under section 59 and obtained a return on 25-7-1980 showing principal value at Rs. 6,37,716. When both appeal and reassessments were pending, the Assistant Controller requested the Appellate Controller to enhance the principal value of the estate by Rs. 75,000 which according to the Assistant Controller was the value of goodwill in the firm of Byculla Trading Co. which remained to be included. In a peculiar order dated 21-7-1984 the Appellate Controller dismissed the appeal as infructuous, thus shutting out both the revenue and the taxpayer. The Appellate Controller observed as below: "Since the Assistant Controller has reopened the assessment under section 59 of the Estate Duty Act, 1953, and has to complete the estate duty assessment afresh, the appeal filed against the original order has become infructuous and therefore dismissed as such." Possibly, the Appellate Controller did not realise the implication of his decision which in view of CIT v. A. D. Shroff [1957] 31 ITR 284 (Bom.) and S. Inder Singh Gill v. CIT [1963] 47 ITR 284 (Bom.) would disable the revenue and the accountable person from agitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly all material facts necessary for assessment. Hence, section 59(a) would not apply. There has also been no information in consequence of which Assistant Controller could have reason to believe that the property chargeable to estate duty has escaped assessment. Hence, section 59(b) would not be applicable. The Assistant Controller has not discussed this aspect in his reassessment order but has instead proceeded to frame a fresh assessment as if it was the original assessment. He observed as below: "Thus the assessment has now been reopened as stated above and it is settled law that once assessment is reopened, it is reopened assessments for all practical purposes and all the aspects of assessment are to be considered afresh as if no previous assessment was made taking into consideration this legal position about the reopening of the assessment in regard to valuation of immovables and valuation of shares, etc., de novo." Shri Trivedi wondered how the Assistant Controller could have framed such a sweeping legal proposition. Even the case law most favorable to the taxpayer does not support such a sweeping proposition. In Smt. Saraswati Devi Lohia v. CIT [1964] 51 ITR 491 (All.) D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Controller was furnished. (2) Detailed notes dated 10-12-1979 regarding valuation of various immovable properties were given to Assistant Controller, who scrutinised the same before finalisation. (3) The actual gold bonds were produced before Assistant Controller to enable him to make sure that the bonds had not become the subject-matter of exemption earlier and to enable him to stamp the document so that the next holder would not again get the exemption under section 33(1) (p). The mode of acquisition, date of acquisition and other dates to show that section 33(1) (p) is applicable, was all before Assistant Controller. (4) The balance sheet of limited company was shown." Thus what has been attempted through reassessment amounts to change of opinion on the same facts, not permitted under section 59. 5. Shri Trivedi was aware of the stand taken by the Appellate Controller that the action under section 59 would be justified in view of the instructions of the Dy. Controller. Though not specifically referred to by the Appellate Controller the reliance is possibly on CIT v. H. H. Smt. Chand Kanwarji [1972] 84 ITR 584 (Delhi). Shri. Trivedi whilst admitting that he did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dissolution deed is on record cannot be a ground for making such an allegation. Even otherwise, the deed is not relevant if the Assistant Controller was satisfied that whatever be the provision in the partnership deed, there was in fact no goodwill at the relevant time. This is precisely what has happened in this case. Thus, in substance the provisions of section 2(15), 9 and 27 have been fully examined at the time of original assessment. 7. At this stage, we may conveniently refer to the IAC's note dated 3-3-1980. The IAC has stated that 'there appears to be under-assessment'. The IAC obtained a copy of the will of the deceased dated 17-10-1977 where the total value of the assets left by the deceased was Rs. 19,85,083. The IAC has not, however, referred to any omission any dutiable property from the estate duty return. He referred to the value of one share of J. D. Bytco Cosmetic (P.) Ltd. as declared by the executors at Re. 1 per share. Nothing turns on this as the value adopted in the original assessment is Rs. 622 per share. The IAC has next referred to valuation, by executors, of immovable properties at Rs. 8,08,553 by execution. Here again since the original assessment ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no revaluation even in wealth-tax. 10. The IAC has then referred to the advisability of obtaining valuer's opinion regarding immovable properties. As this is also in the nature of new investigation and was taken up after issue of notice under section 59 nothing turn on this issue in favour of the revenue. 11. The IAC has then doubted whether the Assistant Controller had taken a proper look at the income figures of J. D. Bytco Cosmetic (P.) Ltd. to determine the goodwill not appearing in the balance sheet. Here again there is no information that the figure work of the Assistant Controller is not correct. 12. Coming now to the order of the Appellate Controller under appeal, Shri Trivedi submitted that the Appellate Controller may be right in observing that there is no provision in the 1953 Act corresponding to section 148(2) of the 1961 Act requiring recording of reasons, but this does not mean that section 59 can be invoked for effecting wholesale review of the original order and in the process introducing new subjective opinion, and innovation. The Appellate Controller may also be right in holding that the time limit for section 59(a) and 59(b) is the same. On this ground, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V. Pugalagiri v. ACED [1981] 132 ITR 847 (Mad.) directly on estate duty assessment Shri Trivedi contended that even where the Assistant Controller is aware of a higher value in wealth-tax assessment and adopts different value, reopening is not permitted. Reliance was placed on Ramesh Chandrasen Ashar v. K. M. Barshiwala, Addl. First aced [1984] 148 ITR 1 (Bom.). This is, however, regarding audit objection as information. Reference was then made to G. Ammer v. CED [1984] 150 ITR 443 (Ker.) which again deals with audit opinion and information. Lastly, reference was made to ITO v. Madnani Engg. Works Ltd. [1979] 118 ITR 1 (SC) which requires disclosure of material for belief for holding that income has escaped assessment. In the case before us no such material has been brought. In support of his contention that section 59(a) and (b) mark distinct categories without overlapping common area reliance. Shri Trivedi was prepared to argue regarding was placed on Kanhaiyalal v. CIT [1982] merits of the additions also but we do not propose to go into the same as the issue does not arise out of the order of the Appellate Controller. 14. In reply, Shri Roy defended the order of the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced, as this deed refers to the partnership deed, it would be reasonable to hold that the partnership deed did become the subject-matter of scrutiny. One has to take note of the fact that in the course of discussion and hearing several documents, etc., are looked into though they might not have been formally mentioned in the assessment order. The working of goodwill given at Rs. 75,000 without prejudice is itself a clear pointer. As the Assistant Controller has not denied the contention regarding production of partnership deed the statement made by the representative of the accountable person should be accepted. Shri Trivedi further clarified on the factual aspect that the business of Byculla Trading Co. came to a complete closure and did not devolve on any person after dissolution. The closing entries have been rightly taken note by the Assistant Controller. Regarding South India Corpn. Agency Ltd.'s case Shri Trivedi distinguished the same as it dealt with conversion rate to be adopted and was substantiative. In the case before us the alleged failure of the Assistant Controller in respect of valuation considered by someone else as referable to valuation cell is no failure at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1975] 98 ITR 486 (Pat.), it is observed as below: "... Income-tax Officer may be confined to those recorded reasons to support the assumption of jurisdiction..." In our opinion, in view of the fact that the assumption of jurisdiction is appealable, the above conclusion would apply mutatis mutandis to estate duty also even though the estate duty enactment may not have provision corresponding to section 148(2). 18. The contention that once an assessment is validly reopened the Assistant controller's powers are conterminous with those in the original assessment is not acceptable. The best that can be said is that as held in Maneklal Harilal Spg. Mfg. Co. Ltd.'s case if an assessment is validly reopened, the fact that the recorded reason for reopening does not survive does not ipso facto oust the jurisdiction of the Assistant Controller. If at the time of reopening three was any information which would have been mentioned but which was in fact not mentioned for the purpose of section 59(b) it may be permissible to examine the same. In the case before us, however, a good deal has been left to our imagination about the state of mind of the Assistant Controller who was allegedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 7,23,000 shown by the accountable person. The accountable person was aggrieved by this valuation but in view of the Appellate Controller's order dated 21-7-1984 the accountable person cannot agitate the point again because the 1953 Act has no provision corresponding to section 152(2) of the 1961 Act. On facts, it cannot, therefore, be said that any estate in the form of immovable property value has escaped assessment merely because the Assistant Controller did not make a reference to the departmental Valuation Officer. 20. The IAC then refers to the fact that the goodwill of the limited company was taken as per version of the accountable person without calling for the records of the company assessed in Bombay. But unless it is shown that the Bombay records do show a value different from that taken by the accountable person and the Assistant Controller, it cannot be said that there is any 'information' on the point for the purpose of section 59. Computation of goodwill is a matter of opinion. Unless it is shown clearly that the valuation is in violation of established principles, one cannot discover 'information' for section 59 purpose. Lastly, the IAC's observations regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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