TMI Blog1992 (6) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... years also. 3. Assessee is a world-famous play-back singer. She was entitled to royalty on the sale of records of her songs. On pages 7 and 8 of the assessee's paper-book is a copy of the statement of total wealth for assessment year 1977-78, wherein total wealth is computed at Rs. 18,51,793, but it does not contain any amount in respect of the royalty or the right to receive the royalty. On the other hand, as part of the Part-III of the return, there is a note in the following terms-- " Part III 1. ........................................................................................................... 2. Amount receivable for gramophone records royalty due but received after the valuation date and also subject to the contention that the amount is not taxable as the accounts are maintained on cash basis, the same may be dealt with according to law. H.M.V. Rs. Polyder Rs. 12,713 Saraswati Stores Rs. .................. " In the original assessment order, an addition of Rs. 1,65,177 was made for the amount of royalties from gramophone records which had become due upto the relevant valuation date, viz., 31-3-1977, but were actually received after the valuation date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advocate for the assessee drew our attention to the relevant part of the para marked 1.1 of the appellate order to say that the original objection was modified after inspection of records before the CWT(Appeals) and the modified plea before the CWT(Appeals) was that action would be within time, if it is regarded as covered by section 17(1)(a), but out of time if it were under section 17(1)(b). The CWT(A) held that action was covered by section 17(1)(a). Learned Advocate for the assessee, before us, apart from challenging this aspect of the decision of the CWT(Appeals), urged that we should uphold the assessee's contention that action taken for reopening the cases under section 17 was beyond time if the case is covered by section 17(1)(b) and not so if under section 17(1)(a). For this, we called upon the learned Advocate for the assessee to furnish, before us the relevant dates, like the dates of notices issued under section 17 and the dates of service thereof. They were not readily available with the learned Advocate for the assessee and, therefore, he could not furnish them before us. 5. On our specific query, learned Advocate could not show us from the order of the CWT(Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M. Sarda v. 1st ITO [1992] 62 Taxman 132 (Kar.), (c) Basanta Ram Kedarnath v. ITO [1987] 165 ITR 777 (Cal.), and (d) Sampat Ram Budhmal Dugar v. CWTR [1987] 178 (Raj.) (sic). 9. Learned Departmental Representative, on the other hand submitted that action under section 17 was rightly taken and he strongly supported the order of the CWT(Appeals) about which he submitted that it was a very detailed order and convincing too. He submitted that very substantial values of the said future right to receive royalty on future sales have been added and the assessee had not disclosed at the time of original assessment the existence of such right. 10. We have very carefully considered the rival submissions, and also studied the cited decisions. In our opinion, there is no warrant for inferring that the existence of the right to receive royalty in future on future sales of gramophone records was disclosed by the assessee at the time of original assessments nor is it possible to hold that the existence of such a right was otherwise in the knowledge of the Assessing Officers at the time of making original assessments. Assessee was putting a note and the Assessing Officers were including in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sments does not and cannot lead to a conclusion that the assessee had disclosed the existence of right to receive royalty in future on future sales of records, let alone the probable extent of amounts involved. Since the dispute at the time of original assessments was only whether the amounts accrued, but actually received later on were includible in the net wealth or not, there was no occasion for the ITO to find out even the basis of the quantification of the amount of royalty. When precise amounts were available and shown as received subsequently ; the matter, thus, ended there itself. Assessee had not disclosed the existence of right to receive royalty on future sales of gramophone records and the Assessing Officer had no occasion to envisage such a possibility because precise figures of royalty actually received were available with the assessee and the only precise point for decision was whether these precise amounts should be included in the net wealth in spite of the fact they were received actually (by the assessee) after the respective valuation date. We would not rule out the possibility of assessee also having not realised that the right to receive the royalty in future ..... X X X X Extracts X X X X X X X X Extracts X X X X
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