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TMI Blog2010 (10) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... bullion weighing 123.720 kgs. to Ganpatlal and others, and still continues in possession thereof? (3) If answer to the above question is in the affirmative, then whether on the facts and in the circumstances of the case, the Tribunal was justified in coming to the conclusion that 123.700 kgs. of gold bullion was not entrusted by the assessee to Ganpatlal and others, and the assessee is still in possession and custody thereof and the same is the property of the assessee without any restriction of enjoyment? (4) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the value of 66 kgs. of gold out of 123 kgs. can be treated as an asset on the relevant valuation date, when the same was not traceable and was not returned by Ganpatlal and others? (For the asst. yrs. 1966-67 to 1975-76 and 1978-79 to 1981-82) (5) Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the silver in question is an asset belonging to the assessee on the relevant valuation date and its value is to be included in the net wealth of the assessee? (For all the assessment years under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst Ganpatlal and others. During investigation 57 kgs. of gold was recovered from Ganpatlal and kept in the District Treasury at Chittorgarh. During trial in the criminal case Ganpatlal and Hiralal were convicted by the Court of Addl. Asstt. Sessions Judge, Udaipur, vide judgment dt. 11th Jan., 1975. In appeal, the Addl. Sessions Judge, Udaipur, by order dt. 7th Aug., 1978 acquitted them and their acquittal was maintained by High Court in appeal. 3. In the assessment proceedings, for the assessment years under consideration, the assessee claimed that value of 123 kgs. of gold should not be included in computing his net wealth because 57 kgs. of gold, recovered from Ganpatlal was still in possession of the police and was not delivered to him and he had lost the ownership of this 57 kgs. gold and the same was not an asset belonging to the assessee. These gold bars had foreign marking and as such it was a prohibited article. As regards remaining 66 kgs. of gold, it was contended that the same cannot be treated as an asset of the assessee because it was not returned to him by Ganpatlal and others nor the same could be traced by the police. The AO rejected these contentions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax (Appellate Tribunal) Rules, 1963 ("Rules, 1963" hereafter) framed in exercise of the powers conferred by s. 255(5) of the IT Act, 1961 provides for the grounds which may be taken in appeal and in terms of r. 11 of Rules, 1963, the appellant before the Tribunal cannot urge a ground not set forth in the memorandum of appeal without taking leave of the Tribunal and the Tribunal cannot rest its decision on such additional ground unless the affected party had a sufficient opportunity of being heard on that ground. Rule 11 of Rules, 1963 is quoted below for ready reference:- "11. Grounds which may be taken in appeal:- The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule:- Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground." 8. The Supreme Court in the matter of National Thermal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues being raised as additional ground, were already on record and the additional issue was already decided by the Tribunal in favour of the assessee for other years. But the position is different in present case, therefore, the judgments relied upon by the counsel for the Revenue are distinguishable on their own facts and they do not help the Revenue in this case. 12. Coming to the facts of the present case, the additional ground raised by the Revenue before the Tribunal for the first time, that the version of the assessee that the gold was given on trust to Ganpatlal and others was a concocted story, was a purely factual ground which did not involve any legal issue. For raising such a factual ground, there was no foundation in the order of the AO or before the CWT(A) since neither before the assessing authority nor before the appellate authority i.e., CWT(A), the Revenue had contested the assessee's stand that the gold was given on trust to Ganpatlal and others. 13. It is not disputed before this Court that no application was filed by the Revenue under r. 11 of Rules, 1963, before the Tribunal for raising such a ground and the ground was argued for the first time w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 18. Thus, we answer the question No. (2) in favour of the assessee. Question No. (3):- 19. Since the question No. (2) is answered in negative, in favour of the assessee, therefore, the question No. (3) does not arise for consideration. Question Nos. (1) and (4):- 20. These questions are overlapping and interlinked since 66 kgs. of gold mentioned in question No. (4) is included in total 123 kgs. of gold mentioned in question No. (1). Out of 123 kgs. of gold mentioned in question No. (1) for 57 kgs. of gold recovered from Ganpatlal, the assessee had claimed ownership and balance 66 kgs. of gold is untraceable. Therefore, position of 123 kgs. of gold needs to be examined in two parts i.e., the one relating to 57 kgs. and other for 66 kgs. 21. So far as 57 kgs. of gold is concerned, on the assessee's complaint, in the criminal prosecution of Ganpatlal and others, for offence under s. 406 of the IPC, the Addl. Asstt. Sessions Judge, Udaipur, in Sessions Case No. 22 of 1969 had convicted the accused by judgment dt. 11th Jan., 1975 and had directed that the police will convey the seized gold to the nearest Gold Control Officer. The Addl. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CWT), the following question was referred to this Court:- "(iv) Whether on the facts and in the circumstances of the case, the Tribunal has erred in holding that 57 kgs. of primary gold was an asset belonging to the assessee on the relevant valuation date and the value thereof is includiblc in the net wealth of the assessee?" 25. The aforesaid question has been answered by this Court in favour of the assessee for those years at the joint request of the assessee as well as the Revenue by common order dt. 2nd July, 2009. Therefore, for the assessment periods under consideration also the Revenue is precluded from taking a different stand having conceded for the other assessment years. 26. For the periods 1994-95 to 2000-01 also the assessee's version was accepted and following the order of the High Court dt. 2nd July, 2009 passed in IT Ref. No. 6 of 1996 (Meghji Girdhar vs. CWT), the Tribunal by order dt. 23rd Oct., 2009 did not include 57 kgs. of gold in the net wealth of the assessee. 27. Thus, it is held that 57 kgs. of gold out of 123 kgs. of gold was not an asset belonging to the assessee on the relevant valuation date and it is not includable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kgs. of gold is not to be included in the net wealth of the assessee." 29. We find no flaw in the aforesaid reasoning and there is no reason to take a different view when for other assessment period the above finding has become final. Thus, we hold that this 66 kgs. of gold cannot be held to be an asset on the relevant valuation date and its value is not includible in the net wealth of assessee. 30. Thus, in view of the above analysis, it is also held that 123 kgs. of gold (57 kgs. + 66 kgs.) was not an asset belonging to the assessee and value thereof is not includible in the net wealth of assessee. The question Nos. (1) and (4) are accordingly answered in favour of the assessee. Question Nos, (5) to (10):- 31. Learned counsel appearing for the assessee has submitted that he did not wish to press question Nos. (5) to (10) referred by the Tribunal and the same may be answered against the assessee. Accordingly, question Nos. (5) to (10) are answered against the assessee on the basis of the statement made by counsel for the assessee. Question at the instance of the Revenue:- 32. This question relates to adoption of discounted value of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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