9911796707
TMI Blog1991 (2) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... said undisclosed income should be bifurcated in assessment years 1977-78 to 1982-83. Considering the price of gold in the years pertaining to assessment years 1977-78 and onwards, the Settlement Commission held that it would be reasonable if a sum of Rs. 2,35,000 is taken as income from undisclosed sources. Thus, undisclosed investment in jewellery was determined by the Settlement Commission at Rs. 2,74,000 but its discounted value was added in assessment years 1977-78 to 1982-83 aggregating to Rs. 2,35,000. 2. According to the assessee, the amount of unexplained investments in jewellery of Rs. 2,74,000 sustained by the Settlement Commission consisted of the following items :-- Rs. 1. Ornaments belonging to B.D. Patel HUF 1,19,290 2. Ornaments purchased by M.S. Patel (admitted by the assessee) 94,220 3. Silver Utensils belonging to-- (1) B.D. Patel HUF : 23,346 (2) Ushaben L. Gajjar : 37,904 ------------ 61,250 ---------------- 2,74,760 ---------------- Apart from the aforesaid items, ornaments of Rs. 1,09,550 claimed as belonging to M.S. Patel HUF, according to the assessee, has been accepted by the Settlement Commission, which has been disputed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 2. Bansibhai D. Patel-HUF 6175 gms Rs. 1,19,290 Rs. 32,913 3. Silver Utensils 244 Kg. Rs. 61,250 Rs. 31,964 belongs to Bansi Bhai D. Patel Ushaben Patel -------------------------- ----------------------- Rs. 2,89,540 Rs. 1,09,969 -------------------------- ----------------------- 2.2 In similar manner the value of these items of ornaments and silver utensils was determined by the WTO for assessment years 1978-79 to 1981-82 at the prevailing market rates on the respective valuation dates. The figures of additions are as under : --------------------------------------------------------------------------------------------------------------------------------------------------- Name of the owner Value as on ----------------------------------------------------------------------------------------------------- 31-3-1978 31-3-1979 31-3-1980 31-3-1981 --------------------------------------------------------------------------------------------------------------------------------------------------- 1. M.S. Patel-HUF 56,259 79,270 1,12,518 1,43,820 2. B.D. Patel-HUF 41,064 57,860 82,128 1,04,975 3. Silver Utensils 33,721 41,187 65,026 66,368 belong to B.D. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old ornaments and silver utensils belonged to his HUF. These gold ornaments were received by him on the death of his mother in October 1972. He had left the same with the assessee (his sister's husband) while leaving India in August 1978. The mere fact that this explanation of the assessee has not been accepted in the settlement proceedings by the Settlement Commission would not establish existence of wealth belonging to the assessee as on the respective valuation dates. These items of gold ornaments and silver utensils in fact belongs to the respective owners and the assessee has no right, title or interest over those articles. The assessee merely agreed to pay income-tax thereon in view of the order passed by the Settlement Commission to acquire peace and obviate litigation. He also invited our attention towards the end of para 3 of the order passed by the Settlement Commission wherein this fact has been reiterated that these gold ornaments really belong to the assessee's brother-in-law Shri B.D. Patel and hence the same should not be included as his wealth. The Settlement Commission observed that since they are not dealing with the wealth-tax assessments, it is not necessary for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re claimed to be belonging to Shri B.D. Patel his brother-in-law, cannot be accepted as the name of B.D. Patel is not mentioned on these silver utensils and also as there is no evidence to show that these utensils belong to the assessee's brother-in-law. It has further given a specific finding that the jewellery amounting to Rs. 94,220 which is offered by the assessee himself is to be treated as a part of the undisclosed jewellery. Similarly the Settlement Commission has given a definite finding that the sum of Rs. 1,19,290 representing jewellery said to be belonging to Shri B.D. Patel is to be taken as applicant's investment from undisclosed sources. The total of these three items comes to Rs. 2,74,760. The Settlement Commission has determined the value of undisclosed investments in jewellery and silver utensils at Rs. 2,74,000. As regards the assessee's claim with regard to gold ornaments claimed as belonging to the smaller HUF, the Settlement Commission has observed that the part of the ornaments said to be of bigger HUF received on partition by the smaller HUF and the ornaments purchased by the assessee from time to time during the period 1961-71 have also to be taken as undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than--............." The term "valuation date" has been defined in section 2(q) as under : "2(q) "Valuation date" in relation to any year for which an assessment is to be made under this Act, means the last day of the previous year as defined in section (section 3) of the Income-tax Act, if an assessment were to be made under that Act for that year :" A plain reading of the aforesaid sections indicate that the value of only those assets can be assessed as wealth in the hands of the assessee which are conclusively proved to be owned by the assessee on the respective valuation dates. The mere fact that in the income-tax proceedings certain income has been charged to tax by rejecting the assessee's explanation and by bifurcating the total amount of unexplained jewellery on estimated basis in diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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