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TMI Blog1989 (9) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, the Dy. CWT(A) ought to have accepted the value of jewellery not in the possession of assessee at Rs. Nil. 2. The brief facts relation to the aforesaid appeal and the cross objection are as under: The despite relates to valuation of jewellery and ornaments. The WTO has assessed the value of entire jewellery and ornaments at Rs. 8,00,000 on the basis of valuation of such jewellery and ornaments made by the Registered valuers as on 31st March, 1976 at Rs. 7,37,200. Since the valuation date relation to the year under appeal was 31st Oct, 1978, the WTO had enhanced value by gold ornaments and jewellery determined at Rs. 7,37,200 b y Registered valuer as on 31st Jan., 1976 to Rs. 8,00,000. The aforesaid value of Rs. 8,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill pending. A statement at bar was made by the learned counsel that despite all such efforts the assessee had not received any part of the jewellery from the Calcutta party till the date of hearing. The Dy. CWT(A) had held that considering the aforesaid circumstances the WTO was not justified in including the total estimated value of such jewellery lost by the assessee at Rs. 5,20,000 and further held that the WTO should have taken only the discounted value of such right to receive compensation/jewellery which is subject matter of prolonged litigation in different courts. He, therefore, estimated the value of such right to receive compensation/jewellery at 25% of the value determined by the WTO as on 31st March, 1976 and accordingly direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jewellery and ornaments in question since the year 1976 and despite prolonged and continued litigation and various other legal proceedings the assessee has not been able to recover any part of the jewellery and has also not been able to recover any part of the jewellery and has also not been able to receive any amount of compensation from the Calcutta party till today. He also invited our attention towards the report of the Select Committee on the WT Bill, 1957, reported in (1957) 32 ITR (Suppl) 54. The relevant extras are reproduced hereunder: "Item (q):-The amendment is clarification in nature. With regard to the definition of 'net wealth' the Committee have noted the assurance given by the Minister of Finance that if any asset refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, by virtue of such possession he was simply a custodian of the property upto the time it was finally released in his favour by the Government. He could not have used the said property according to his own liking and will. Therefore, the very element of ownership which is there in the meaning of belonging was missing in the possession of the assessee of the amount in question. The restraint that was there on his right to utilise, use and invest the amount in question according to his will was removed only on 22nd Sep., 1981, when he was discharged of his obligation under the guarantee given by him to the bank and by the bank to the Government on his behalf. The amount was not the asset of the assessee on the valuation date as it did not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly happened in the various legal proceedings initiated by him against Calcutta party. He placed reliance on the judgment of Hon'ble Supreme Court in the case of CWT vs. Abdul Hussain Mullah Muhammad Ali (1988) 70 CTR (SC) 82 : (1988) 172 ITR 614 (SC) to support his contention that where the tax implications of large financial obligations are sought to put an end to, the burden is heavy on the assessee to establish that what would otherwise be the incidents of the transaction is were excluded from contemplations by the parties. He emphasised that such a self declaration that the assessee has lost the possession of jewellery is not enough for reduction of the value of jewellery taken by the WTO at Rs. 5,20,000 to only Rs. 1,20,000. He, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny asset referred to in the relevant definition was lost or stolen or destroyed it would not be included Income Tax Officer computing the net wealth of an assessee provided the same had not been insured the jewellery in question was not insured and the assessee has not received any amount of compensation from the Calcutta party or from any other concerned person or department so far over a period of 13 years In view of aforesaid facts we are of the considered opinion that such a right to receive compensation in lieu of lost jewellery has no market value on the relevant valuation date. We therefore, hold that the Dy. CWT. (A) should have reduced the value of Rs. 5,20,000 adopted by the WTO Accordingly we accept the cross objection submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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