TMI Blog2005 (11) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nge 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. - HON'BLE HARI OM MARATHA, JUDICIAL MEMBER AND R.S. SYAL, ACCOUNTANT MEMBER For the Appellant : Vikas Balia, Adv. For the Respondent : Swati Joshi, Adv. ORDER R.S. Syal, Accountant Member. 1. This appeal by the revenue and cross-objection by the assessee emanate from the order passed by the CIT(A) on 13-3-2000 in relation to assessment year 1991-92. 2. The only ground raised by the revenue is against the deletion of addition of Rs. 4,25,437 made by the Assessing Officer on account of unexplained investment in gold ornaments. 3. Briefly stated, the facts of this case are that a search action under section 132(1) was taken on the residential premises of the assessee on 17-8-1990 in which some incriminating material was found and seized. A notice under rule 112A read with section 132(5) was issued. In the meantime, the assessee filed writ petition before the Hon'ble High Court of Rajasthan challenging the legality and validity of action under section 132(1). The Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. It was stated that before leaving for Surat, she left bangles, rings and one pandle weighing 101 gms. with her mother, Smt. Meera Kalwani, for getting the ornaments converted into new ones. The Assessing Officer did not accept the genuineness of this explanation as well. Similarly, Smt. Usha Khubani, the other daughter, for which 177.2 gms. were claimed to be belonging to her, was also not accepted by the Assessing Officer. To sum up, out of total gold ornaments of 1296 gms. found in the search, the Assessing Officer treated 94.2 gms. as explained and for the balance gold ornaments of 1201.8 gms. he made addition of Rs. 4,25,437 under section 69 of the Act. The ld. CIT(A) in the first appeal, after considering the evidence and details, knocked out the said addition. 6. We have heard the rival submissions and perused the relevant material on record. As regards the jewellery of 667.3 gms. claimed to be belonging to Smt. Meera Bai, wife of the assessee, we find that the Assessing Officer had accepted only 94.2 gms. on the ground that the description of items in list dated 20-12-1983 and those found in the present search was not tallying. Pages 13 and 14 of the PB are the copy of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se held that the possession of gold jewellery by married ladies to the extent of 500 gms. should be considered as explained. Several orders have been passed all over India by different Benches of the Tribunal accepting the possession of gold jewellery to the extent of 500 gms. per married lady. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 143(3) and there was no reference whatsoever to the proceedings under section 148. She submitted that the ld. CIT(A) erroneously noted the fact of issuance of notice under this section though the final decision upholding the legality of the Assessing Officer's action was in order. It was further contended by her that when Hon'ble High Court stalled the proceedings and passing of order under section 132(5), the regular assessment could not have been made and hence the passing of regular assessment was also indirectly stayed. She also relied on certain decisions to submit that the order under section 132(5) was simply an interlocutory order and the subsequent proceedings were automatically stayed on the stayal of proceedings under section 132(5) and the Assessing Officer had rightly passed the assessment order under section 143(3) after the dismissal of the writ petition by the Hon'ble High Court on 6-7-1999. 10. We have considered the rival submissions in the light of material placed before us and the precedents relied upon. The primary question, which falls for our consideration is to decide as to whether or not the regular assessment proceedings were staye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se were seized. The payment of interest on the excess assets retained is dealt with in sub-section (4) of section 132B, which reads as under: (a) The Central Government shall pay simple interest at the rate of eight per cent per annum on the amount by which the aggregate amount of money seized under section 132 or requisitioned under section 132A, as reduced by the amount of money, if any, released under the first proviso to clause (i) of sub-section (1), and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (i) of sub-section (1), exceeds the aggregate of the amount required to meet the liabilities referred to in clause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immediately following the expiry of the period of one hundred and twenty days from the date on which the last of the authorizations for search under section 132 or requisition under section 132A was executed to the date of completion of the assessment under section 153A or under Chapter XIV-B. 11. The logic behind sub-section (5) of section 132 is to expedite the return of seized assets after retaining what is due by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized assets to be retained against the tax liability already incurred and thereafter, regular assessment p follows finally determining the amount of income. It is clear that the passing of order under section 132(5) is a first step where money and valuables so-seized are retained and after passing the order under this sub-section, the regular assessment takes place. If due to one reason or the other, the proceedings under section 132(5) are stayed, as is the case in hand, the final order of assessment under section 143(3) cannot be passed? If we go by the contention raised by the ld. A.R. that the Assessing Officer-was not forbidden from completing the assessment under section 143(3) and the order under section 132(5), which was staved for the time being, could have been passed later on, it would create a situation in which a baby is born first and act of conceiving takes place later. Obviously, notice under section 132(5) was issued in the instant case on 23-8-1990 as against which the assessee approached the Hon'ble High Court, who vide its judgment stayed the passing of final order under section 132(5). Once the passing of provisional summary order under section 132(5) was s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under section 148 was invalid because the earlier assessment proceedings were pending. We fully endorse his view, which is supported by several decisions of the Hon'ble Supreme Court, High Courts and Tribunals that the income cannot be said to have escaped assessment until final order of assessment is passed on the pending proceedings. But the position under consideration is a bit different. It is no doubt true that notice under section 143(2) was issued on 14-2-1992 and notice under section 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 under section 143(3). There is no reference whatsoever to the passing of order under section 147. In other words, the Assessing Officer issued notice under section 143(2) and completed assessment under section 143(3) and in the process though a notice under section 148 was also issued but that was not proceeded with. Hence the resultant assessment is pursuant to notice under section 143(2) and cannot be said to be a reassessment order under section 147. The position would have been different if the Assessing Officer had framed assessment pursua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, it is found as an admitted position that the receipts and outgoings recorded in the cash book prepared after the date of search were not subject to verification in the absence of receipts and vouchers. Here it is pertinent to mention that we are dealing with a search case, prior to the introduction of Chapter XIV-B, being the special procedure for assessment of search cases. In the new procedure, the undisclosed income is determined Under Section 158BC, which is different in scope from regular assessment that is made in addition to the block assessment. Whereas the ambit of block assessment is confined only to the determination of the undisclosed income, the verification of the disclosed particulars including the making of estimate of income, falls within the domain of regular assessment. In the period anterior to the concept of block assessment, only one assessment was made which comprised of both the determination of undisclosed income as well as regular income in one go. Since we are dealing with the assessment in the prior period, the making of estimation of income by the revenue authorities cannot be interfered with, if such estimate is within the reasonable limits. Adverti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the amount was invested partly out of the proceeds of maturity amount of FDR in her name in the SBBJ at Sardarpura, Jodhpur. Here also, both the authorities below have brushed aside the explanation without assigning any reasons for not accepting the claim. Smt. Usha Khubani had claimed by way of an affidavit that these instruments belonged to her, which is available on record. All this material goes to show that the assessee had discharged his onus cast upon him to prove that the IVPs worth Rs. 7,000/- and KVPs worth Rs. 20,000/- did belong to Smt. Usha Khubani. Another important fact, which merits acceptance is that the KVPs were in the name of Smt. Usha Khubani, a married daughter of the assessee for which the primary onus was upon her to explain the source of the investment. Since she had discharged this onus by showing proceeds of maturity of FDR and withdrawal from her capital account from M/s Usha Saree Kendra, Delhi, we are of the considered opinion that no addition was called for in the hands of the assessee. This addition is, therefore, deleted. 19. Ground No. 4 of the cross objection deals with estimation of household expenses at Rs. 60,000/-, which led to the making o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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