TMI Blog1987 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax returns for the assessment years 1964-65 to 1973-74 simultaneously on October 9, 1974. On October 10, 1974, he filed the return for the assessment year 1974-75 with which we are concerned in this reference. In this return, he disclosed an income of Rs. 23,300 from tailoring business, business in cloth cut-pieces and money-lending. He also disclosed an agricultural income of Rs. 15,000 for the purpose of rate. The filing of the returns suddenly on October 9 and 10, 1974, was the result of a notice issued under section 139(2) by the Income-tax Officer on September 25, 1974, for the assessment year 1974-75. This notice could not be served upon the assessee as he was involved in criminal cases and was also detained under the Maintenance of Internal Security Act. It is evident that he came to know of it. (He was detained on the ground that he was indulging in organizing the gambling known as " matka ") The assessee disclosed varying figures of income for the assessment years 1964-65 to 1973-74 ranging from Rs. 3,559 to Rs. 35,795. The sources of income were, however, the same throughout. The Income-tax Officer found that during the accounting year relevant to the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the said contention, the Income-tax Appellate Tribunal called for and obtained the wealth-tax records relating to the assessee and looked into the same. The Tribunal rejected the assessee's contention on the following reasoning : the wealth-tax returns for the assessment years 1967-68 to 1974-75 were filed only on October 23, 1974, simultaneously ; indeed, the return relating to the assessment year 1966-67 was filed even later, on February 3, 1975. In other words, the wealthtax returns were filed only after the income-tax returns for the said assessment years were filed on 9th and 10th October, 1974. In his assessment orders made for the assessment years 1966-67 to 1973-74, the Wealth-tax Officer referred to the stand taken by him in the order of assessment relating to the assessment year 1974-75 and stated that he was making those wealth-tax assessments accepting the returns as made by the assessee on a protective basis. In the wealth-tax assessment for the assessment year 197A-75, the stand taken by the Wealth-tax Officer is the same as the stand taken by the Income-tax Officer in the incometax assessment for the said year. In this view of the matter, the plea of money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed therein were referred to during the course of the arguments, it cannot be accused of looking into the same behind the back of the assessee. The attribution is, to say the least, uncharitable. Now, coming to the assessment orders under the Wealth-tax Act, which have been printed as part of the record before us, we find that all the assessment orders for the assessment years 1966-67 to 1973-74 contain an express rider which negatives the very basis of the argument addressed by the assessee. In the assessment order for the assessment year 1966-67, the last sentence reads thus: "Consequently, without prejudice to my finding for the assessment years 1974-75 and 1975-76, the wealth returned for the year 1966-67 is hereby accepted. " Similar words are found in each of the assessment orders for the said assessment years up to and inclusive of 1973-74. It is thus evident that not only the wealth returned was accepted, but it was accepted without prejudice to his findings for the assessment years 1974-75 and 1975-76. It, therefore, cannot be said that the wealth returned by the assessee was implicitly accepted or that the said acceptance explains the source of the disputed income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch can be called an explicit qualification-no such argument is open to the assessee. For the same reason, we are also of the opinion that the said acceptance of the assessment does not constitute independent evidence relevant in the matter of determining the sources of income of the assessee for the accounting year relevant to the assessment year 1974-75. Mr. Ranganathachari then contended on the basis of the decision of the Kerala High Court in CIT v. Cochin Company (P.) Ltd. [1976] 104 ITR 655, that inasmuch as the Revenue has also collected wealth-tax on the basis of the assessment orders aforesaid, relating to the assessment years 1966-67 to 1973-74, they are estopped from taking a contrary stand in the present proceedings. It is submitted that the Revenue cannot be permitted to collect tax on the basis of the assessment orders under the Wealth-tax Act relating to the earlier years and, at the same time, take a contrary stand in the present proceedings under the Income-tax Act. It is submitted that allowing the Revenue to take such a stand would be unjust and unequitable. May be the principle contended for is unobjectionable; but, there is no material in this case, nor was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the returns submitted by the assessee and with an express rider that the said acceptance is without prejudice to the findings recorded in the income-tax assessment orders relating to the assessment years 1974-75 and 1975-76. The net effect is that the said assessment orders under the Wealth-tax Act do not, in any manner, invalidate or vitiate the assessment orders made under the Income-tax Act for the assessment year 1974-75. For the same reasons, we answer question No. (2) in the affirmative and hold that the said assessment orders under the Wealth-tax Act for the earlier years do not constitute independent evidence relevant to the assessee's plea that he was possessed of large funds in earlier years. So far as question No. (3) is concerned, it is essentially a question of fact and no reasons are shown as to why we should interfere with the said question of fact in this reference. Indeed, question No. (3) is merely consequential upon questions Nos. (1) and (2). Inasmuch as we have answered questions Nos. (1) and (2) in favour of the Revenue, we must answer question No. (3) also in the affirmative, i.e., in favour of the Revenue. Referred case is answered accordingly. No c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, peep into each other as the wealth under the Wealth-tax Act generates income at times and the income under the Income-tax Act produces wealth or provides an accretion to the already existing wealth. There are also situations of wealth-tax assessees having no chargeable income under the Income-tax Act and likewise income-tax assessees do not attain the status of having sufficient wealth chargeable to wealth-tax. As they are independent enactments, the assessments under both acts for the same assessment year can co-exist without being treaded upon by the principle of double taxation and the estoppel does not operate as there can be no estoppel against statute. But, however, certain situations of incongruity and inconsistency cannot be overlooked. In the instant case, the wealth-tax returns filed at a time for the assessment years are accepted and assessments are made. The circulating capital provided by the wealth is sought to be exploited for the spurt of investments in the years relevant for the assessment year. By the acceptance of the returns, the assessments made under the Wealth-tax Act have become final. The contention of the assessee that the assessing authority canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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