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TMI Blog2004 (9) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 35 of the Wealth-tax Act, 1957 were applicable to the case? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that the assets other than jewellery could be revalued in the course of the respondent assessee assessment proceedings under section 17 of the Wealth-tax Act, 1957?" The reference relates to the assessment year 1970-71, for which the relevant valuation date was March 31, 1970. The respondent is an individual. In the assessment originally made on December 16, 1970, he claimed exemption on the value of the jewellery under section 5(1)(viii) of the Act, which was accepted by the Wealth-tax Officer, on the basis of a decision of the apex court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeding to make a fresh assessment by revising the value of assets from what was taken in the original assessment on the basis of the report of the Valuation Officer for subsequent years by projecting it backwards to arrive at their value for the year under appeal, since this was a mere change of opinion in regard to the valuation of the assets from what was held at the time of the original assessment. The Appellate Assistant Commissioner, therefore, upheld only the addition on account of the value of jewellery to the extent of Rs. 66,700 and held that the other additions by revising the value of the assets from what was determined at the time of making the original assessment were not justified. Feeling aggrieved, the Department came in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 17 of the Act. He relied upon the following decisions: (i) IAC of Agrl. IT and ST v. V. M. Ravi Namboodiripad [1974] 96 ITR 73 (SC); (ii) Indian and Eastern Newspaper Society v. CIT [1979] 119 ITR 996 (SC); and (iii) CWT v. Sheela Devi Goel [1981] 132 ITR 517 (All). Sri Mahajan, learned counsel for the Revenue, has submitted that section 5(1)(viii) of the Act was retrospectively amended by the Finance (No. 2) Act, 1971, with effect from April 1, 1963, whereby the exemption on the value of the jewellery was withdrawn. The Wealth-tax Officer has granted exemption on the value of the jewellery which, in view of the retrospective amendment, was not admissible and, therefore, the wealth in so far as the exemption granted on jeweller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne section will not apply where the provisions of the other section are applicable as held in Hira Lal Sutwala v. CIT [1965] 56 ITR 339 (All); Mrs. Gladys S. Koder v. ITO [1976] 104 ITR 220 (Ker); Sirsa Industries v. CIT [1984] 147 ITR 238 (P&H); Indra Singh and Sons Pvt. Ltd. v. Union of India [1967] 64 ITR 501 (Cal); G. Sreerama Murthy v. ITO [1974] 97 ITR 290 (AP); CIT v. Himatlal Bhagubhai [1972] 86 ITR 481 (Guj); R. Madhavan Nair v. CIT [1976] 105 ITR 813 (Ker); Bihar State Road Transport Corporation v. CIT [1976] 103 ITR 736 (Patna) and ITO v. Margarine and Refined Oil Co. Ltd. [1982] 133 ITR 791 (Karn). The Assessing Officer has jurisdiction to take action under either of the two sections as the circumstances may require. In the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Act, 1971. This court had not considered the question as to whether the provision of section 17 of the Act is also attracted or not. As already mentioned hereinbefore, as a result of the retrospective amendment in section 5(1)(viii) of the Act, the exemption on jewellery was not admissible and, therefore, the net wealth chargeable to tax has escaped assessment for that year. Thus, the Wealth-tax Officer was perfectly justified in initiating proceedings under section 17 of the Act. So far as the question as to whether in the course of reassessment proceedings is concerned, the assets other than jewellery could be revalued by the Assessing Officer concerned, it may be mentioned here that once the assessment is reopened, the original order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer had not only the jurisdiction but it was his duty to levy tax on the entire income that had escaped assessment during that year." A Full Bench of the Bombay High Court in the case of CIT v. Indian Rare Earth Ltd. [1990] 181 ITR 22, has held that once a valid proceeding under section 147 of the Income-tax Act is started, the Assessing Officer has not only the jurisdiction but it is his duty to complete the whole assessment de novo. While reassessing an assessee, the Assessing Officer does not assess him on the escaped income but the assessment is made on his taxable income, as held in the case of CST v. H. M. Esufali H. M. Abdulali [1973] 90 ITR 271 (SC). Thus, it is well settled that if an assessment has been reopened, the entire as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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