TMI Blog1995 (3) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... his brother Sri N.C.J. John during the asst. yrs. 1970-71 to 1974-75. His brother had gifted identical number of shares in the same companies during these assessment years. Value of shares indirectly gifted to minor children are assessable in the hands of the assessee under s. 4 of the WT Act. These shares are not reflected in the return of wealth of the assessee for these years. I have reason to believe that by reason of the omission or failure on the part of the assessee to disclose full and truly all material facts necessary for assessment of his net wealth, the net wealth chargeable to tax has escaped assessment for the asst. yr. 1972-73." For similar reasons, the assessments for the asst. yrs. 1973-74, 1974-75 and 1976-77 were reop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. These gifts were assessed to gift-tax. The same GTO had jurisdiction over the assessee under WT and IT matters. In the original assessments or in the previous reassessments the value of the gifted shares were not included in the net wealth of the assessee, perhaps for the reason that they did not constitute cross gifts. However, on the same set of facts and materials a different view had been taken and thus the reassessments were triggered by the change of opinion. There was no failure on the part of the assessee to disclose the material facts necessary for the computation of wealth. Hence, the reassessments cannot be sustained under s. 17(a) of the WT Act; nor they can be sustained under s. 17(b) of the Act as the same are barred by lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO was not aware of the factum of gifts. Value of the gifts were not included in the net wealth of the assessee in the original assessments or in the earlier reassessments. One possible reason for the non-inclusion might be due to the fact that these gifts were not considered as cross gifts. Alternatively, another equally possible view could be that the import of these gifts were not properly appreciated while completing the original assessments. Further, the import of the expression `indirectly' found in s. 4(1)(a)(ii), (iii) and (iv) was not free from judicial controversy and the earliest decision on the cross gifts in the context of WT Act was only that of the Bombay High Court in the case of CWT vs. Mahavirprasad Bubna Ors. (1980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] . . . Total value taken to s. G of Part III of the Return." . . . It should also be stated in this context that the caption Annexure XV is not clear about the fact whether "indirect transfers" to spouse or minor child, etc., are to be mentioned therein. The learned Departmental Representative submits that the mention of s. 4(1) under the column for description of assets was inclusive enough to cover indirect transfers to the spouse or minor child. But the mention of s. 4(1) is along side the mention of proviso to s. 4(1) which speaks of transfer to wife after 31st March, 1964 and, therefore, it cannot be said that the assessee was called upon to state all the "indirect transfers" made by him in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares being considered as forming part of the cross gifts to be assessed in the ratio of the decision of the Supreme Court in the case of Bharat Hari Singhania Ors. vs. CIT (1994) 118 CTR (SC) 125 : (1994) 207 ITR 1 (SC). For all these reasons, we set aside the orders of the learned CIT(A) and direct the AO to complete the assessments on the basis of the amnesty returns furnished for the asst. yrs. 1972-73, 1973-74, 1974-75 and 1976-77. The AO is directed to adopt the value of the shares in accordance with the Supreme Court decision reported in (1994) 118 CTR (SC) 125 : (1994) 207 ITR 1 (SC). He is further directed to adopt the value of fictitious deposits as found in the amnesty returns and as upheld by the CIT(A). 7. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by issue of notice under s. 17 on 12th Nov., 1980 and the reassessment was completed on 27th March, 1986 determining the net wealth at Rs. 16,89,900. In the preceding paragraphs in the quantum appeals, we have held that the reopening of the assessments under s. 17(1)(a) was bad in law. We have further held that the reassessments cannot be sustained even under s. 17(1)(b) of the WT Act as the notice for reassessment which was issued on 12th Jan., 1980 was long after the prescribed time limit of four years from the end of the relevant assessment years. Therefore, the levy of penalty in the course of the reassessment proceedings cannot be sustained. On the basis of the statement made at the Bar, we have further directed the AO to complete th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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