9911796707
TMI Blog1983 (6) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... t. yr. 1977-78 the assessee had adopted the value of the jewellery at Rs. 2,09,525 on the basis of valuation report for March, 1975. According to her, there was increase in the value of the jewellery from March, 1975 to 31st March, 1977, 31st March, 1978, 31st March, 1979 and 31st March, 1980, the valuation rates relevant to the four assessment years under appeal. The claim before the CWT(A) was that there was no increase in the value of the jewellery which was studded with precious stones and had very little gold content. In support of this contention, the assessee produced before the CWT(A) valuation and appraisal of diamonds, emeralds, rubies, sapphires and gold and silver jewellery pamphlet issued by the Gem and Jewellery Export Promotion Council, Bombay. A perusal of this pamphlet supplied by the assessee showed the increase in the value of the jewellery as compared to 31st March, 1975 as under: Items % increase as on . . . . 31-3-1977 31-3-1978 31-3-1979 31-3-1980 Small Diamonds 15% 38% 61% 16% Big Diamonds 19% 33% 57% 12.5% Pearls Nil Nil Nil Nil Rubies Nil Nil Nil Nil Sapphires Nil Nil Nil Nil Emeralds Nil Nil Nil Nil Gold 10% 25% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a little on the high side. In our opinion, it would meet the ends of justice if the value of the jewellery for this year is adopted at Rs. 3 lakhs. The assessee will be entitled to relief of Rs. 37,300 on this account for this year. 4. The second ground of appeal which is again common for all the four assessment years is against inclusion of interest of Rs. 41,750 for each of the asst. yrs. 1977-78 to 1979-80 and of Rs. 2,06,250 for the asst. yr. 1980-81 in the net wealth of the assessee. The assessee advanced loans to Princes Trivikama Kumari and to Golden Son Cinema Theatre. Accrued interest income from these loans has not been shown in the income and expenditure account. It was stated before the ITO that no interest had been received from the above parties. It was also contended that such inclusion made by the ITO in the income of the assessee had been deleted by the AAC for the asst. yr. 1976-77. The CWT(A), however, did not accept the above contention and held that right to receive the interest had accrued and, therefore, the same was the asset of the assessee and includible in her net wealth. The CWT(A) has upheld the additions for all the four years. 5. The assessee is agg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of A.T. Mirji observed as under: "This is the view expressed by the Full Bench of the Allahabad High Court on the interpretation of s. 13 of the 1922 Act in CIT vs. Smt. Singhari Bai, 12 ITR 224, 239". "I read that as meaning, if I have understood the case rightly that it is the method of accounting regularly employed by the assessee himself that the ITO is bound to take as the basis for computing true income-tax figure according to that method, then it is open to the ITO to make any adjustment that is necessary for the purpose of giving full and true effect of the method itself". "The above reasoning equally applies to this case in view of s. 7(2)(a) of the Act. In the present case, there was no reason for disregarding the cash system of accounting employed by the assessee according to which the amounts not received could not be treated as income of the assessee". 7. From the above extracts, it is clear they where cash system of accounting is regularly maintained income not received cannot be considered as the asset of the assessee for the purpose of computing his net wealth. The issue that the provisions are applicable in the case of assessee's business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, in our view, there is no basis for the Revenue not to accept the accounting system regularly employed by the assessee. In such circumstances, we are unable to sustain the orders of the authorities below and direct the WTO to exclude the deemed interest included in the net wealth for all the four assessment years. 9. We would also like to add that whether in view of the provisions contained in r. 2C of the WT Rules, 1957, it could be said that the WTO was not competent to make adjustment in respect of assets not disclosed in the balance sheet, this point has already been answered by the Tribunal, Bombay Bench 'D' (Special Bench) in the case of Shri N.M. Saha vs. 2nd WTO (1981) 1 ITD 244 (Bom) (SC). In para 30 of the above order, the Bench observed as under: "...but we shall at this stage consider the contentions of the parties based on the provisions of the r. 2C which provides for adjustments in respect of an asset not disclosed in the balance sheet. Though it is true, as contended by the learned standing counsel, that the words not disclosed does not necessarily mean an erroneous or wilful omission of an assessee to disclose an asset in the balance sheet and may simp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory exemption to the extent of Rs. 30,000 the balance of Rs. 20,000, Rs. 18,000, Rs. 16,000 and Rs. 12,000 respectively were included in the net wealth of the assessee. The CWT(A) has upheld the additions. Shri Ranka maintained that the value assessed by the authorities below was excessive keeping in view the fact that the assets were old. We have already pointed out earlier that one of the vehicles is a mercedes car another one an Indian car for the third one a jeep. It is a common knowledge that there has been appreciation in the values of motor vehicles year after year. Taking into consideration the appreciation in values as well as depreciation on account of normal wear and tear, the value fixed by the authorities below cannot be said to be excessive. No interference with the orders of the CWT(A) is called for. 11. The last ground of appeal which is only for the asst. yr. 1980-81 is with regard to value of shares of Lake Shore Palace Hotel Pvt. Ltd., during accounting period ending 31st March, 1980, the assessee acquired shares of Lake Shore Palace Hotel for a sum of Rs. 87,565. However in the WT return, the value of these shares was shown at Rs. 50,000 on 31st March, 1980 bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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