Rajasthan High Court - Jaipur
Commissioner Of Income-Tax vs Lal Chand Agarwal on 29 August, 2002
Equivalent citations: [2003]259ITR497(RAJ)
JUDGMENT
1. This appeal is directed against the order of the Tribunal dated July 31, 2000.
2. A search operation was carried out on July 7 and 8, 1987, in the residential premises of the assessee situated at Katla Purohitji, Jaipur. The residence was jointly occupied by the assessee and his two brothers, namely, Ghanshyam Das Agarwal and Goverdhan Das Agarwal, and also their mother, Smt. Radha Devi. During the course of search, some cash, gold ornaments and certain jewellery were seized, as per annexure C-14. Some jewellery was also found in addition to the jewellery seized, which was however released. The list of the jewellery is as per annexure D-4. The assessee has made a surrender of income of Rs. 9,28,516 during the course of search. Some time after the search, the Gold Control authorities attached jewellery belonging to the assessee kept in a locker. This jewellery was valued at Rs. 13,57,900. Again that was revalued by the Gold Control authorities at Rs. 7,985 only. The total income of the assessee was assessed at Rs. 17,57,580, as one-third of the total seized cash, jewellery and gold and silver articles had been assessed in the hands of the assessee and his two brothers.
3. Being aggrieved, the assessee carried the matter before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) found that the Assessing Officer has not properly valued the jewellery, therefore, he restored the matter to the Assessing Officer to revalue the ornaments and jewellery and get it valued by an approved valuer. The relevant para, of the order of the Commissioner of Income-tax (Appeals) reads as under :
"But instead of making any relevant enquiries or investigation in the matter the Assessing Officer has rejected the claim of the appellant in an arbitrary manner by making various presumptions. The Assessing Officer has not even bothered to get the said ornaments valued by an approved valuer of the Department before rejecting the claim of the appellant. This issue is therefore restored to the file of the Assessing Officer with the directions that the said jewellery and ornaments which are still in the custody of the Customs Department may be got valued from an approved valuer of the Department in the presence of the appellant and the Customs authorities. The consequential relief should thereafter be allowed by deducting difference between the value of the ornaments determined at Rs. 13,56,000 at the time of order under Section 132(5) and the value of ornaments which would be finally determined by an approved valuer of the Income-tax Department."
4. When the matter has been restored to the Income-tax Officer, though he has complied with the directions and got valued the gold ornaments and silver ornaments at Rs. 31,591, in addition to that he has also assessed the jewellery found in the locker which was in the name of Smt. Radha Devi, the mother of the assessee, and which was seized by the Customs authorities on March 24, 1988.
5. That jewellery has not been considered in the original assessment dated March 27, 1991, nor any direction has been given by the Commissioner of Income-tax (Appeals) to value that jewellery or make the addition in the income of the assessee on account of that jewellery found in the locker of Smt. Radha Devi.
6. In appeal before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has upheld the addition made by the Income-tax Officer on the basis of valuation of jewellery found in the locker which was in the name of Smt. Radha Devi and has upheld the view taken by the Assessing Officer.
7. In appeal before the Tribunal, the Tribunal found that there was no direction of the Commissioner of Income-tax (Appeals) in the first round, regarding the valuation of jewellery found in the locker of Smt. Radha Devi, nor was the assessment order set aside in toto with a direction to make a fresh assessment nor was that jewellery the subject matter in the original assessment, therefore, the Tribunal held that the Income-tax Officer has gone beyond the directions of the Commissioner of Income-tax (Appeals) in order dated March 13, 1992, therefore, the addition made by the Income-tax Officer, on the fresh ground that addition is deleted.
Heard learned counsel for the parties.
8. Mr. Singhi, learned counsel for the appellant, submits that though there was no direction to value the ornaments found in the locker of Smt. Radha Devi, but that was the jewellery which was found and which was unaccounted, therefore, the Assessing Officer made the addition on the basis of investment made in that jewellery.
9. Mr. Kasliwal, learned counsel for the assessee, submits that when the jewellery found in the locker of Smt. Radha Devi was not the subject matter of the original assessment, nor has any direction been given by the Commissioner of Income-tax (Appeals) for valuing that jewellery for the purpose of addition in the income of the assessee, the Income-tax Officer cannot go beyond the directions of the Commissioner of Income-tax (Appeals) in giving effect to the order of the Commissioner of Income-tax (Appeals) dated March 13, 1992. Learned counsel for the assessee placed reliance on the decisions of this court in the cases of Rambilas Chandram v. CIT [1985] 156 ITR 344 and in the case of CIT v. Mahindra and Co. [1995] 215 ITR 922.
10. Before we go into the facts of this case, we would like to refer to the view taken by this court on a similar issue in the case of CIT v. Mahindra and Co. [1995] 215 ITR 922. At page No. 928, this court has observed as under :
"In these circumstances, we are of the view that the Income-tax Appellate Tribunal was justified in holding that the scope of assessment made by the Income-tax Officer in pursuance of the directions issued under Section 250 of the Income-tax Act by the Appellate Assistant Commissioner was limited and the Income-tax Officer was not competent to tax the sum of Rs. 4,29,593 when at the time of original assessment, the same was not the subject matter of appeal. In view of this position of law, we answer the first question in favour of the assessee and against the Revenue. The Tribunal was justified in upholding the finding of the Commissioner of Income-tax (Appeals) that the provisions of Section 52(2) of the Income-tax Act, 1961, could not be invoked in this case and in deleting the addition made on this account."
11. In the case of Rambilas Chandram v. CIT [1985] 156 ITR 344, this court again considered the scope of fresh assessment after direction of the appellate authority. In this case the direction was given to make the fresh assessment after re-examining various factors involved and no limit was put on the assessment, therefore, this court held that the Income-tax Officer can re-examine and make the fresh assessment without any limitation and restrictions. The relevant observation of this court at page 352 reads as under :
"Having examined the order of the Appellate Assistant Commissioner dated November 11, 1968, by which the assessment order dated November 6, 1967, of the Income-tax Officer was set aside and the case was sent back to the Income-tax Officer for reframing the assessment order after examining the various factors involved in detail, giving an opportunity to the assessee before the additions are made, is an order of remand without any limitations or restrictions. In our opinion, as the case was sent back to the Income-tax Officer without any restrictions, the Income-tax Officer could exercise all powers which he could otherwise exercise at the time of making the original assessment. The Tribunal was right when it held that though no additions were made in tilli and alsi accounts while framing the original assessment, the Income-tax Officer could re-examine the matter after remand by the Appellate Assistant Commissioner without any limitation and restriction."
12. In the case in hand when the assessment order dated March 13, 1992, was challenged before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has given the specific directions regarding the assessment of jewellery, that the jewellery which was before the Assessing Officer at the time of original assessment be got valued by an approved valuer. The relevant directions read as under :
"But instead of making any relevant enquiries or investigation in the matter the Assessing Officer has rejected the claim of the appellant in an arbitrary manner by making various presumptions. The Assessing Officer has not even bothered to get the said ornaments valued by an approved valuer of the Department before rejecting the claim of the appellant. This issue is therefore restored to the file of the Assessing Officer with the directions that the said jewellery and ornaments which are still in the custody of the Customs Department may be got valued from an approved valuer of the Department in the presence of the appellant and the Customs authorities. The consequential relief should thereafter be allowed by deducting difference between the value of the ornaments determined at Rs. 13,56,000 at the time of the order under Section 132(5) and the value of ornaments which would be finally determined by an approved valuer of the Income-tax Department."
13. From the above directions, it is crystal clear that the directions were limited on making fresh assessment or to give effect to the order of the Commissioner of Income-tax (Appeals). The Assessing Officer while making the fresh assessment has gone beyond the directions given by the Commissioner of Income-tax (Appeals), and had valued the jewellery which was seized by the Customs authority from the bank locker of Smt. Radha Devi, the mother of the assessee. The Commissioner of Income-tax (Appeals) in the second round has confirmed the view taken by the Assessing Officer without realising the fact that the direction in the first round of proceeding was limited.
14. In appeal before the Tribunal, the Tribunal after quoting the direction in para. 10 and para. 11, of its order has observed as under :
"Since the directions read with the relevant observations were quite specific, it was not appropriate on the part of the Assessing Officer to go beyond the scope of the directions. The learned Assessing Officer got the valuation of the ornaments done by the approved valuer who determined the value at Rs. 31,591 of the said ornaments under dispute. As per the directions of the Commissioner of Income-tax (Appeals) in the first round, the assessee is, therefore, entitled to relief of the amount equivalent to the difference between Rs. 13,56,000 and Rs. 31,591. The Assessing Officer is, therefore, directed to allow the relief of Rs. 13,24,409 in the hands of the three brothers equally for the three appeals before us."
15. When the direction of the Commissioner of Income-tax (Appeals) in the point of first round was limited for valuing the jewellery which was available to the Assessing Officer at the time of original assessment made on March 27, 1991, and when the jewellery which was found in the locker of Smt. Radha Devi was not the subject-matter of the original assessment and there was no direction of the Commissioner of Income-tax (Appeals) in respect of the jewellery found in the locker of Smt. Radha Devi.
16. The Assessing Officer has committed error, in fresh assessment, in taxing the jewellery which was not the subject-matter of the original assessment.
17. Therefore, we find no infirmity in the order of the Tribunal. In the result, the appeal stands dismissed.