TMI Blog2003 (3) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... ough not in detail in order to enable us to give our own reasoning for the finding which we will be arriving at. Thus, the brief facts are that the assessee, Ashok Kumar Mathuradass Zinzuwadia, is a proprietor of M/s. Radhika Jewellers, Rajkot, and carried on business of gold ornaments. A search and seizure operation was carried out on the residential and business premises of the assessee on 16th of November, 1995. During the search, statement of the assessee was recorded under section 132(4) of the Act and he disclosed an unaccounted income of Rs. 75 lakhs. However, while filing the return for the block period, the assessee disclosed the income of Rs. 26,66,559. The assessment for the block period was completed on 19th Nov., 1996, thereby determining the total income at Rs. 29,76,934. During the search unaccounted gold was found for which the assessee made disclosure in his statement under section 132(4) of the Act. However, later on he explained that out of these gold, 10,255 gms. belongs to two non-resident Indians, namely, Haresh M. Pala and Smt. Urmilaben H. Nanda. Haresh Kumar residing at Sharjah came to India and brought with him gold weighing 4,996 gms. Similarly, Smt. Urmi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of representation to the person who would be deemed as an agent of non-resident by issuing the notice for this purpose. Thus, the Assessing Officer has given such opportunity and concluded that the ownership of the gold rest with Haresh Kumar Mansukhlal Pala and Smt. Urmilaben. The assets belonging to above two persons are in India and, therefore, taxable under the Wealth-tax Act. The assessee, Shri Ashok Kumar, is holding this asset in possession on the valuation date relevant for the assessment year. He can, therefore, be treated as an agent of Haresh Kumar and of Smt. Urmilaben and as such the learned Assessing Officer passed a statutory order under section 16(2) of the Wealth-tax Act for this purpose. Against these two orders, the assessee filed appeals before the CWT(A) and the learned CWT(A) dismissed both these appeals. In this way, two appeals have been preferred by the assessee against the appointment as an agent of the non-resident, Smt. Urmilaben and of Haresh Kumar. After appointing the assessee as an agent of the two non-residents, the Assessing Officer levied tax on the value of gold ornaments according to the Wealth-tax Act. The assessee in rest of the seven appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar Pala resides outside India, the tax may be levied upon and recovered from his agent. This agent shall be deemed to be the assessee for all the purposes of Wealth-tax Act in respect of such amount of tax. The procedure and the consequences of the appointment of the agent, the rights and liabilities of such an agent are laid down in section 22 of the Wealth-tax Act. Ashok Kumar M. Zinzuwadia has been appointed as an agent after affording him appropriate opportunity for this purpose as he is in possession of or has custody of the assets of the person residing outside India. Therefore, there is no infirmity in the order passed by the Assessing Officer under section 22 of the Wealth-tax Act appointing Shri Ashok Kumar as the agent of Shri Haresh Kumar. In fact, this order is a necessary and natural consequence of the factual submission made by Shri Ashok Kumar in the course of block assessment proceedings. Accordingly, the grounds of appeal are dismissed." 8. The learned counsel for the assessee contended before us that notice under section 22 for treating the assessee as an agent of the two non-resident in the Wealth-tax Act was issued on 1st Dec., 1997. The assessee had return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch agent, an amount equal to the sum so paid. (5) Any agent, or any person who apprehends that he may be assessed as an agent, may retain out of any money payable by him to the person residing outside India on whose behalf he is liable to pay tax (hereinafter in this section referred to as the principal), a sum equal to his estimated liability under this section, and in the event of any disagreement between the principal and such agent or person, as to the amount to be so retained, such agent or person may secure from the Assessing Officer a certificate stating the amount to be so retained pending final settlement of the liability, and the certificate so obtained shall be his warrant for retaining that amount. (6) The amount recoverable from such agent or person at the time of final settlement shall not exceed the amount specified in such certificate, except to the extent to which such agent or person may at such time have in his hands additional assets of the principal. (7) Notwithstanding anything contained in this section, any arrears of tax due from a person residing outside India may be recovered also in accordance with the provisions of this Act from any assets of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was simple business deal. Rather the conduct of the parties to the agreement shows that the gold was retained by the assessee in a representative capacity because no person would allow a manufacturer of gold ornaments to keep the gold for such a long time. 10.3 The learned counsel though emphasized the point that later on, ornaments were returned to the owner after receiving necessary making charges. In support of his argument, he drew our attention to the copies of bills sought to be produced as additional evidence. 10.4 We do not see much force in the contention of the learned counsel for the reason that this exercise was carried out after receipt of notice under section 22, which can be considered as an afterthought with a view to evade the tax. Moreover, permission to lead additional evidence could no be granted in a routine manner on the asking of the party. The additional evidence can be permitted subject to just exception, if the Tribunal felt the necessity of evidence, enabling it to decide the appeal. We do not feel such necessity of the alleged bills sought to be produced in the additional evidence for deciding this appeal. Thus, we decline to accept the prayer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 22 of the Wealth-tax Act, if a person is found to be in possession or custody of an asset belonging to an Indian residing outside, then, he would be deemed to be an agent of such person, whereas under the Contract Act, the position is contra. The principal would appoint a person as his agent only then the agent can act according to the directions of the principal. This section 22 was inserted in the Act to ensure that no person owning taxable asset would be escaped from levy of tax on the ground of dispossession of the asset on the day of valuation. For example, if "A" is the owner of an asset liable to wealth-tax, handed over the asset to B not in term of section 2( 47 ) of Income-tax Act, 1961 would the asset be absolved from the levy of tax by mere transfer of a possession? Our reply is, simply, no. Thus, by importing meaning of agent from the Contract Act, we cannot restrict the power of the Assessing Officer provided in section 22 of the Wealth-tax Act. It is a settled principle of law that if the words of the statutes are in themselves precise and unambiguous, then no more can be necessary than to expound those words in their natural and ordinary sense. The words themse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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