9911796707
TMI Blog1978 (7) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the question of status Officer to the adopted for the ease year 1967-68 cropped up. The assessee adduced evidence to satisfy the WTO that it had been assessed in the status of HUF for the asst. yrs. 1964-65 and onward by production of copy of the assessment orders. The WTO was convinced about the status but he found that in the assessments completed earlier in the status of HUF, the HUF had been declaring the value of gold ornaments at Rs. 20,000 which had been assessed as such. He, therefore, called upon the Karta to adduce positive evidence and reasons for not having shown the value of the jewellery (gold ornaments) for the year under consideration and the subsequent assessment years which are now under appeal. 3. In response to the above query from the WTO, a written reply dt. 19th July, 1975 was filed with the submission that in the return for asst. yrs. 1964-65, jewellery of Smt. Ram Bheji, wife of the Karta of the assessee family, was shown through inadvertence and that Smt. Ram Bheji had received jewellery from her father at the time of her marriage and this constituted her stridhan. The WTO was called upon to determine the taxable wealth of the assessee in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icata does not apply to the proceedings and each assessment year is an independent unit. The value of jewellery it was contended, was returned in the net wealth of the assessee inadvertently in the earlier years because at the time of partition of the bigger HUF, no jewellery was received by the assessee HUF. Affidavits were also filed by the Karta Shri Kishan Chand Sethi and his wife Smt. Ram Bheji to the effect that no jewellery was received at the time of partition of the bigger HUF and that the jewellery was the personal property of Smt. Ram Bheji which she had received on her wedding on 20th Feb., 1944. The orders of the ITO accepting the partition of the bigger HUF were also placed before the AAC. A copy of the will, by Lala Hira Nand Sethi, written on 17th April, 1942 was placed before the AAC. He perused these documents and observed that "from the evidence filed it can be said that there is only a circumstantial evidence that no jewellery was the subject of the partition yet there is no positive evidence to show that the jewellery was not the subject matter of the partition or that no jewellery was received by the assessee HUF at the time of the partition of the bigger HUF" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no evidence whatsoever on the basis of which it could be said that the jewellery came to the HUF on the partition of the bigger HUF as believed by the WTO and also by the AAC. 10. It was submitted that the facts that Kishan Chand Sethi under a mistake and the fact that he was not properly informed about the position of law he made the value of the jewellery belonging to his wife as part of the net wealth of the family should not be taken as a justification for perpetuation of the wrong perpetrated earlier. It was submitted that the Revenue had nothing to assess the assessee for the assessment years under appeal on the value of the jewellery except the unfortunate inadvertent default of the assessee in declaring the value thereof in the net wealth of the assessee. This has, it was contended, already made the assessee suffer and on the realisation of the error committed, the assessee should have a right to remedy the situation. It was emphasized that even the AAC was convinced that by circumstancial evidence the assessee had proved its case but he stopped short off giving the assessee the necessary relief without any apparent justification for his action. 11. It was submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mething for his marriage as mentioned in the will (Rs. 12,000) and if at the time of marriage, any jewellery was purchased with the aid of these funds by Shri Kishan Chand Sethi, that would form nucleus of the HUF. It was submitted that the letter dt. 8th Nov., 1966 clearly showed that Kishan Chand Sethi, the Karta, considered the jewellery as belonging to the HUF. The Revenue contended that the assessee is having second thoughts because from the asst. yr. 1966-67 because of the revaluation of the assets, it was coming under the tax net. The AAC, therefore, was fully justified in rejecting the claim of the assessee and confirming the orders of the WTO that the jewellery belonged to the HUF. 13. We have given careful thought to the rival submissions. We have also perused the relevant evidence on record with a view to appreciating the contentions of the rival parties. Before we proceed to assess the evidence and decide the issue one way or the other, we have to observe that it is now well settled by judicial pronouncements that the doctrine of res judicata does not apply so as to make a decision on a question of fact or law in a proceeding for assessment in one year binding in anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 25A for the asst. yr. 1947-48 made on 23rd July, 1948 and the judgment of Sr. Sub-Judge, 1st Class, Ferozepore dt. 1st April, 1947 in the case of Harnam Singh Sethi s/o Hira Nand Sethi vs. Kishan Chand Sethi and others has been arrayed by the assessee in support of the proposition that when the patriarch of the family drafted the will, when the joint family was partitioned and the order accepting the partition was made and when a dispute arose about the joint family property between the brothers, no where the jewellery was shown as an asset of the family of which the present family is a smaller unit for partition. 15. The assessee accepts that mistakes through inadvertence have been made in showing the value of the jewellery belonging to the wife of the Karta as belonging to the joint family but has now come up with the plea that that should be used as a cudgel to hammer the assessee with. The claim that we are considering therefore, though cannot be divorced from what happened in the earlier assessment years yet cannot be decided merely because there were earlier assessments on this issue against the assessee. In this regard, we find that the impression in the minds of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at happened in the earlier years, the item of net wealth is that of the assessee. There is no evidence to show that there was any acquisition by the Karta at any point of time with the aid of the HUF funds or that he acquired the jewellery with his income earned out of personal exertion and then impressed it with the character of joint family property. The learned counsel for the Revenue had submitted that an inference could be drawn against the assessee in view of the fact that Rs. 12,000 were given to Shri Kishan Chand Sethi as mentioned in the will and this amount he could have used in the purchase of jewellery for his wife at the time of marriage. However, we can not draw an inference merely either on suspicion or surmise. There must be some connecting link to draw inference of this nature which we find is missing. 17. The absence of any item of jewellery forming subject matter of partition which was recorded by an order under s. 25-A on 23rd July, 1948 and the dispute decided by the judgment dt. 1st April, 1947 by the Sr. Sub-Judge, First Class, Ferozepore clearly supports the contention of the assessee that no jewellery was possessed by the bigger HUF which could come to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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