9911796707
TMI Blog1988 (1) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... -1978. The assessment years involved are 1977-78 to 1982-83. In each of these years the relevant valuation date was the last day of March of the year concerned by English calendar. 3. The 22nd day of July 1982 seems to have been quite an inauspicious day for this family. It was on that fateful day that the Income-tax authorities appear to have simultaneously carried out search and seizure operations u/s 132 of Income-tax Act, 1961 (the Act) and survey operations u/s 133A of the Act at several places in the individual case of Sri Kantilal Gulab Chand Shah, the karta of this family. The search operations carried on at Flat No. 5-1, Sai Apartment, Gopipura, existing in the name of Sri Anil Kumar K. Shah and where at Sri Kantilal G. Shah was living at that time brought out jewellery worth Rs. 2,53,000. The search of Locker No. 2465 with Gujarat Safe Deposit Co. Ltd. in the name of Sri Kantilal G. Shah, opened on 24-7-1982, brought out jewellery weighing 151.45 Tolas worth Rs. 2,33,827 besides cash amounting to Rs. 11,780. In the disposal of these appeals we are not much concerned with the result of search operation at 10/1024, Limdikui, Gopipura another residence of Sri Kantilal G. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -613 of 13-10-1982, Q-616 of 14-10-1982 and the documents attached with those letters Sri Kantilal G. Shah, the Karta, vide his letter dated 11-8-1983 explained that the HUF was possessed of sufficient agricultural lands and the ancestors were also doing money-lending business and that from such income and wealth earning activities the assessee had come to acquire and possess its wealth as declared in various returns. The W.T.O. did not feel satisfied with the explanation offered by the assessee and summed up his conclusions in para 5 of his order as follows : " The assessee has shown value of agricultural lands at Nil in respect of ancestral agricultural lands received by a deed dt. 8-7-63. Copy of the deed is filed. AD the pieces of land are situated at Village Kara Vyara and Bedkuwa. It appears that Shri Gamanaji --- grandfather of Shri Kantilal --- had four sons, namely S/Shri Gulabchand, Amichand, Bhagwandas and Chhotalal. There is claimed to be a partition in about 1943. The particulars of partition are not available. But in view of what is stated in a deed dt. 8-7-63, Shri Amichand and Shri Gulabchand jointly became the owner of lands at Kara Vyara and Bedkuwa. At Kara Vya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in all the appeals vide its application dated 4-11-1987: " The learned Appellate Assistant Commissioner had no power to bear the appeal as the appeal did not fall in any the clauses of sec. 23 of the W.T.Act. " Mr. Vyas submitted that assessments for all the years having been made on 'Protective' basis only not resulting either in any enhancement to the amount of net wealth returned or of the wealth-tax payable the assessee could have no cause for any grievance to go in appeal before the AAC as by filing the returns the assessee had accepted its liability to be assessed under the Act. Opposing the effort by the Revenue to raise the additional ground at this stage of proceedings, Mr. N.R. Divatia, the learned Advocate appearing for assessee, vehemently submitted that objection to the power of the AAC to hear the appeal was never raised before the lower appellate authority, though the W.T.O. had actively participated in the proceedings before him and, therefore, it, should not be admitted at this belated stage. On merits Mr. Divatia submitted that by making protective assessments the W.T.O. had jeopardised the very right of the assessee to be assessed substantively for the net we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned as payable under this Act, or (c) denying his liability to be assessed under this Act: or (d) to (i) may appeal to the Appellate Assistant Commissioner against the assessment order, as the case may be, in the prescribed form and verified in the prescribed manner. " Sub-section (1-A) of sec. 23 is not material for our purpose. 13. It may be noted that the determination of the amount of net wealth of an assessee and of the amount of wealth-tax payable by him gives rights of appeal to him under clauses (a) and (b) above respectively. As the assessee before us was not aggrieved against the amount of net wealth determined nor against the amount of wealth-tax determined as payable by it, neither of the two clauses (a) or (b) of sec. 23(1) stood attracted to its case. Let us proceed further. 14. Clause (c) of sec. 23(1) stands attracted to the cases of those persons who deny their very liability to be assessed under the Act. In the language of this clause the vital distinction made by the Legislature by using the word "denying" instead of the word "objecting" as has been done in the language of all other clauses may clearly be noted. The word "denying" is wider in its meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elonging to that person final he keeps his relationship with that asset in suspense and under the state of suspicion. This makes the liability of that person to be assessed under the Act quite uncertain. This state of uncertainty with regard to his liability to be assessed under the Act should, to our minds, give rise to a right to that person to deny his liability as assessed by the assessing officer. 17. That apart, the phrase 'liability to be assessed under the Act' occurring in the language of clause (c) of sec. 23(1) not only refers to the determining of the liability of a person to the charge of wealth-tax in respect of an asset by also refers to the mode of assessment as well. The words "under the Act" in this phrase mean "in accordance with the provisions of the Act". Section 16 of the Act governs the subjects of making assessment on a person. There is nothing in section 16 which specifically or by necessary implication entities the W.T.O. to assess more than one assessee in respect of the same asset. The departmental practice of making protective assessments, has thus no legal sanction. In the case of a protective assessment, therefore, an assessee may very well say that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We accordingly declare that the appeals of the assessee before the A.A.C. in the present cases were clearly maintainable and were rightly entertained by him. Consequently the additional ground, as raised by Revenue before us, is dismissed. 21. Now coming to the merits of the appeals we find that the findings and conclusion of the learned AAC, as have been quoted by us above, have been challenged by Revenue by raising as many as six grounds of appeal. The pith and substance of all these grounds is that the learned AAC should not have directed the W.T.O to treat the assessments made by him in these cases as having been made in the status of the assessee as HUF on substantive basis. This objective is sought to be achieved by assailing various findings of the learned AAC with regard to assessee's possessing agricultural lands and earning agricultural income so as to form circulating capital for any money-lending business and thus becoming, capable of acquiring jewellery and ornaments, silver vessels and utensils and cash on hand as on the relevant valuation dates. Mr. Vyas heavily relied upon the order of the WTO and contended that the learned AAC, in his approach to the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Firstly, it is the well established proposition of Hindu Law that the normal state of every Hindu family is joint. Legally such a family is to be presumed to be joint in food and worship. Thus there exists a legal presumption in favour of the joint character or status of a Hindu family. But, at the same time there is no presumption, that a family, because it is joint, possesses joint property or any property. Therefore, to render a property to be the joint property of a Hindu family it is required to be proved that the family was possessed of some property with the income of which the property in question could have been acquired or from which the presumption could be drawn that the property possessed by such family was its joint property, or that it was purchased or acquired with joint family fund such as the sale proceeds of ancestral property, or application of the income of its joint fund or even by joint labour. But none of these factors is a matter of legal presumptions. They are to be proved by evidence in the same way as any other facts are proved. Once it is established or admitted that a family possessed some joint property which from its nature or relative value may ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee that its ancestors belonging to Marwari Jain community traditionally carried on money-lending business in that locality inhabited mostly by Adivasis. By their such activities they had acquired vast agricultural lands and jewellery and ornaments. Therefore, with the income from the agricultural land as also from money-lending activities the assessee-HUF, could have been very well in a position to possess the wealth disclosed by it in its returns for various years. The question is whether these facts are probable and also probabilise the possession of the net wealth by the assessee-HUF at the relevant valuation date. 26. In view of the material on record the facts as mentioned above can hardly be disputed. It is not disputed by the department that originally the forefathers of the assessee were living in village and at a time, much prior to the arising of the controversy under consideration, were possessed of vast agricultural land. This fact is fully borne out by the relevant extracts from Revenue record and letters written by the Mamlatdar. It is also not disputed that the said land yielded income either in the form of rent or agricultural produce. The very fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleased on 4-3-1971 and was again engaged by them on that very day under the "Own Your Locker" scheme of the said company. It was released on 26-6-1981 and again engaged by them along with their son and daughter. This conduct of these persons cannot be suggestive of the fact that they had been acting in that way only to create evidence in favour of the articles kept in the locker to be considered joint property of their HUF later on. No doubt engaging lockers does not suggest that any property was kept in it but at the same time the act of engaging the locker does not also suggest that nothing was kept therein. 29. Then again Bank Account No. 8109 was opened on 18-5-1982 with Bank of Baroda and later on it was having a credit balance of Rs.25,701. The case of the assessee in that behalf was that the above amount had been obtained by it from sale proceeds of gold ornaments belonging to HUF. Bill No.554 dated 21-5-82 issued by M/s Chokshi Haji Ali Mohd. Noor Mohd. and the entries in the Bank A/c standing in the name of Sri Kantilal G. Shah and his son Sri Anil Kumar corroborated that fact. The entry dated 1-7-82 in the books of Anil K. Shah showed that Rs. 42,501 were deposited wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
