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2005 (11) TMI 210 - ITAT JODHPURUnexplained Investments in gold ornaments - initiation of assessment proceedings by issuance of notice u/s 148 - whether or not the regular assessment proceedings were stayed by the Hon'ble High Court, when the passing of final order u/s 132(5) was stayed by it? HELD THAT:- In our considered opinion, the ld. CIT(A) was justified in accepting the claim of the assessee with regard to the possession of gold jewellery by Smt. Meera Kalwani to the tune of 667.300 gms. of gold jewellery. Insofar as Smt. Indra, the daughter-in-law of the assessee is concerned, she was claimed to be the owner of 350.5 gms. of gold jewellery. It was explained during the assessment proceedings that she received 194 gms. of gold ornaments as wedding gift from her parents and brothers who resided at Dubai and Taiwan. She further claimed that she received four gold bangles from her mother-in-law as pre-nuptial gift and four more bangles on the occasion of Diwali in 1987. Thus, the total possession of gold claimed to be belonging to her is 350.5 gms Since Smt. Indra had claimed jewellery of 350.5 gms. in her possession, which is much below the prescribed limit of 500 gms., we are of the considered opinion that no addition can be held to be sustainable on this count and the ld. CIT(A) was justified in deleting it. As regards the two daughters of the assessee, namely Smt. Krishna and Smt. Usha Khubani for which 101 gms. and 177.2 gms. have been claimed respectively to be belonging to them, we find that both of them had claimed to have left the jewellery with their mother for conversion. It is a common practice in our society that the daughters rely upon the experience and wisdom of their mother with regard to the conversion or purchase of jewellery. Both of them had asserted through affidavits the retention of gold jewellery with their mother to this extent. Not only this, the assessee in his statement recorded during the course of search also accepted this fact that some jewellery, IVPs and KVPs belonging to his daughters was lying with him. Apart from that, another important aspect, which cannot be lost sight of is that the gold jewellery was found in packets bearing the names of the ladies concerned. Copy of Panchnama placed at pages 65 onwards of the PB clearly admits the fact of different boxes containing jewellery belonging to these ladies separately. These facts indicate that the jewellery to the extent claimed did belong to the concerned ladies. In our considered opinion, the ld. CIT(A) was justified in deleting the addition which was erroneously made by the Assessing Officer. We, therefore, uphold his action. We are of the considered opinion that the Assessing Officer was, impliedly precluded from making regular assessment, till the pendency of the matter before the Hon'ble High Court. No sooner did the Hon'ble High Court dismiss the writ petition on 6-7-1999, an order u/s 132(5) was passed on 7-9-1999 and the assessment order u/s 143(3) was passed on 3-11-1999. Thus, the period during which the matter was subjudice before the Hon'ble High Court was required to be excluded for the purpose of calculating the limitation. The ld. A.R. has fairly conceded that if such period is not taken into consideration, then the order so passed cannot be held to be barred by limitation. Issuance of notice - It is no doubt true that notice u/s 143(2) was issued on 14-2-1992 and notice u/s 148 was issued by the Assessing Officer on 23-8-1999, but the crucial distinguishing feature in this case is that the assessment order was passed u/s 143(3). There is no reference whatsoever to the passing of order u/s 147. The position would have been different if the Assessing Officer had framed assessment pursuant to notice u/s 148 after bidding farewell to the earlier notice u/s 143(2). In that situation all the decisions relied upon by the ld. A.R. would have come into force to hold the resultant assessment order u/s 147 to be illegal. Since the situation under consideration is totally different wherein the Assessing Officer realized his folly of issuing notice u/s 148 when the proceedings u/s 143(2) were pending, he set the situation right by ignoring notice u/s 148 and completing the assessment u/s 143(3). The ld. CIT(A) has, though upheld the action of the Assessing Officer, but failed to consider the facts in the right perspective that the Assessing Officer had not passed the order pursuant to notice u/s 148. As the order itself was passed u/s 143(3), in our considered opinion, the challenge to the validity of issuance of notice u/s 148 and thereby contending the assessment order to be void, is alien to the scope of the appeal and hence bereft of any force. This ground is, therefore, not allowed.
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