TaxTMI 
TaxTMI 
2021 (5) TMI 199
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Income Tax Appellate Tribunal, Bombay Bench 'C', Bombay to refer the 5 questions of law arising out of its orders dated 19.07.1983 in WTA Nos.598 to 612(BOM)/1981 for the assessment years 1961-62 to 1975-76. By order dated 28.08.1984, this court admitted the above Wealth-tax Application and restricted rule to the following two questions of law : "(i) Whether, on the facts and in the circumstances of the case the Tribunal erred in law in including the market value of the said gold in the computation of net wealth of the original petitioner ? (ii) Whether, on the facts and in the circumstances of the case the Tribunal erred in law in rejecting the assessee's submissions that even if the said gold were to be included in the net wealth, the value thereof to be taken ought to be NIL or ought to be arrived at, bearing in mind the liability for confiscation, fine and penalty and bearing in mind that what had to be valued was the price which the assessee claim to be restored possession of the said gold would fetch, if sold in the open market ?" 2.1. The Income-Tax Appellate Tribunal, 'B' Bench Bombay (hereinafter referred to as "the Tribunal") in seven separate W....
X X X X Extracts X X X X
X X X X Extracts X X X X
....old coins in the computation of net wealth of the appellant ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in rejecting the assessee's submissions that even if the gold and gold coins were to be included in the net wealth the value thereof to be taken ought to be NIL, or ought to be arrived at, bearing in mind the liability for confiscation, fine and penalty and bearing in mind that what had to be valued was the price which the assessee claim to be restored possession of the gold would fetch, if sold in the open market ? (3) Whether, on the facts and in the circumstances of the case, Tribunal erred in law in rejecting the assessee's claim that matter had to be considered on the footing of the assessee having invested the said gold and gold coins in gold bonds which were exempt from wealth-tax ? (4) Whether, on the facts and in the circumstances of the case, the Department having knowingly and consciously prevented the assessee from investing the gold and gold coins in the purchasing of the gold bonds under the Gold Bond Scheme which was then in operation, can in law charge the assessee to wealth-tax on the footing that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ongwith Wealth Tax Reference Nos.2 of 1992, WTR No.4 of 1993, WTR No.8 of 1994, WTR No.8 of 1991, WTR No.3 of 1994, WTR No.102 of 1998, WTR No.11 of 2000 and Wealth Tax Appeal Nos. 608 of 2003 and WTA No.362 of 2003. Liberty to both the parties to move for a fixed date of hearing." 3. On 30.10.2018, Supreme Court passed a common order in respect of the subject matter of the above cases in Civil Appeal No.723 of 1973 heard alongwith companion Civil Appeal Nos.10824 of 2018 to 10833 of 2018 and issued the following directions in paragraph 12 which are relevant and read thus :- "......... 12. The impugned order records that owing to counsel not turning up in time, the reference of questions made under the Wealth Tax Act at that point of time would remain unanswered. Given the fact that the show cause notice and proceedings thereafter have now disappeared as a result of the repeal of the Gold Control Act, we give liberty to both parties to add to or amend or delete the questions in the Wealth Tax Reference within a period of eight weeks from today. Once this is done, the writ petitions will be taken up and decided on their merits. Considering these writ petitions are of 2005, we r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed gold should not be confiscated under Rule 126(m) of the said rules. 5.3. By order dated 04.03.1966 the Income Tax Officer included the value of the seized gold in the estimate of income filed by the assessee C.S. Goenka under Section 132(5) of the Income Tax Act. 5.4. In March 1966 C.S. Goenka filed two separate writ petitions before the Rajasthan High Court to challenge the show cause notice dated 03.02.1966 and order dated 04.03.1966 issued under Section 132(5) of the Income-Tax Act; on 17.05.1966 the Rajasthan High Court dismissed the writ petitions, inter alia, holding that the Income Tax authorities and Excise authorities had jurisdiction to institute proceedings against C.S. Goenka under the Income-Tax Act and the said rules and rejected the assessee's case that he had filed application dated 18.11.1965 with the State Bank of India, Indore Branch for disclosure / investment of gold in the Gold Bond Scheme while observing that the application appeared to be forged and the evidence produced was fabricated; being aggrieved C.S. Goenka filed appeal against the order of dismissal of the writ petitions before the Supreme Court; on 12.08.1969 the Hon'ble Supreme Court p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....01.1970 should not be set aside and the gold be confiscated; this show cause notice was challenged by C.S. Goenka by filing a writ petition before the Delhi High Court; Delhi High Court dismissed the writ petition; an appeal was thereafter filed against the judgment of the Delhi High Court before the Supreme Court; on 09.08.1973 the Supreme Court in CMP No.3057 of 1973 (numbered as Civil Appeal No.723 of 1973) directed stay of all proceedings under the Gold Control Act including the show cause notice dated 01.06.1971 pending the final disposal of the appeal. 5.10. On 29.12.1975 C.S. Goenka made voluntary disclosure under Section 14(1) of the Voluntary Disclosure of Income and Wealth Ordinance, 1975 of his wealth of Rs. 18,00,000.00 which included the value of the seized gold (85,617.80 grams) at Rs. 7,50,000.00. Minutes were recorded between C.S. Goenka and the Commissioner of Income Tax that the seized gold will be released and sold and out of the sale proceeds, the Income-Tax and Wealth tax liabilities will be paid over to the Income-Tax department first. 5.11. On 09.03.1979 C.S. Goenka addressed letter to the Income Tax Officer claiming exemption from Wealth Tax liability in r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as the contention of C.S. Goenka before the aforesaid authorities that the value of the gold had been wrongly included while computing his total wealth for the period 1961-62 to 1998-99. Being aggrieved C.S. Goenka filed 39 reference applications in respect of the assessment years 1961-62 to 1992-93 calling upon the Tribunal to refer to this Court, the following 5 questions of law which are extracted as under: "1) Whether on the facts and in the circumstances of the case, the Tribunal erred in law in including the market value of the said gold for the computation of the net wealth of the Petitioner (Chiranjilal Shrimal Goenka) ? 2) Whether on the facts and in the circumstances of the case, the Tribunal erred in law in rejecting the Assessee's submissions that even if the gold was to be included in the net wealth, the value thereof to be taken ought to be Nil or ought to be arrived at bearing in mind the liability for confiscation, fine and penalty and bearing in mind that what had to be valued is the price which Assessee claim to be restored possession of the said gold would fetch if sold in the open market ? 3) Whether on the facts and in the circumstances of the case, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he additional condition of adequate security to be furnished by the assessee was set aside. 5.19. On 22.09.2004 Notice of Demand was issued to Sushila N. Rungta by the Recovery Officer calling upon her to pay Rs. 5,01,86,611.00 alongwith interest. On 17.02.2005 order of attachment of her residential flat was passed by the respondents. On 09.03.2005 Sushila N. Rungta filed Writ Petition No.793 of 2005 in this Court. Several ad-interim orders were passed. However by order dated 25.07.2005 the writ petition was admitted, attachment order was stayed and it was directed that the writ petition be heard alongwith Wealth Tax Reference Nos.2 of 1992, 4 of 1993, 3 of 1994, 8 of 1994, 102 of 1998, 11 of 2000 and Income Tax Appeal Nos.362 of 2003 and 608 of 2003. 5.20. On 22.08.2016, Wealth-tax Reference Nos. 2 of 1992, 4 of 1993, 8 of 1994, 8 of 1991, 3 of 1994, 102 of 1998, 11 of 2000 and Income Tax Appeal Nos.362 of 2003 and 608 of 2003 were dismissed due to non prosecution. Sushila N. Rungta filed 10 special leave petitions (SLPs) in the Supreme Court challenging the order dated 22.08.2016. 5.21. Sushila N. Rungta expired on 07.09.2017 during the pendency of the SLPs. On 30.10.2018 Supr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by this Court, the amendment was not immediately granted and kept in abeyance for consideration at a later stage. Hearing by the parties was concluded on 11.03.2021 and judgment reserved. 5.26. In the above background we are therefore called upon to consider and give our opinion on the following 7 questions of law; 5 questions of law in the Wealth-tax References and Income-Tax Appeals which were framed by this court on 08.09.2016 and the 2 questions of law in Wealth-tax Application No.3 of 1984 which are extracted together for convenience :- "(1) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law including the market value of the gold and gold coins in the computation of net wealth of the appellant ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in rejecting the assessee's submissions that even if the gold and gold coins were to be included in the net wealth the value thereof to be taken ought to be Nil or ought to be arrived at, bearing in mind the liability for confiscation, fine and penalty and bearing in mind that what had to be valued was the price which the assessee claim to be restored p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he respondent. 7. Mr. Kamat, learned counsel appearing for the appellants / petitioners at the outset submitted that the Order-in-Original dated 03.01.1970 passed by the Collector Central Excise, New Delhi directing release of the seized gold to C.S. Goenka on payment of penalty of Rs. 25,000/- has become final; appeal against the said order to the Gold Control Administrator being dismissed on 28.06.1971; the Gold Controller Administrator thereafter suo moto issued show cause notice under the Defence of India Rules to C.S. Goenka; the said show cause notice was challenged before the Delhi High Court and thereafter carried to the Supreme Court whereafter Supreme Court stayed all proceedings on 09.08.1973; Supreme Court by its final order dated 30.10.2018 held that the show cause notice did not survive as the Gold Control Act was repealed. Hence he submitted that C.S. Goenka was the dejure owner of the seized gold. 7.1. He submitted that Civil Appeal No.723 of 1973 having being decided by the Supreme Court has given finality to the order dated 03.01.1970; order dated 03.01.1970 passed by the Collector, Central Excise considered and took into account evidence from both parties, afte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enable him to invest in the Gold Bond Scheme; the said order confirming addition of the value of the seized gold as if in the hands of C.S. Goenka was contrary to law and did not adhere to and take into cognizance the findings returned in the order dated 03.01.1970 passed by the Collector, Central Excise directing release of the seized gold after adjudication. 7.4. Mr. Kamat submitted that the common order dated 29.09.1982 passed by the 2nd Appellate Authority i.e. the Tribunal for the assessment years 1961-62 to 1967-68 has once again erroneously and incorrectly held that there is no denial that the assessee stood possessed and owned the gold on the respective valuation dates even though it was the assessee's case that since the gold had been seized by the authorities it should either be treated as not owned by the assessee or that its value is 'Nil'; the Tribunal disagreed that in such a case principles of equity could be invoked in favour of the assessee. However, he vehemently stressed on the observation of the Tribunal in paragraph 18 of the said order wherein it was stated as under : "18. ......... We are aware that the situation the assessee finds himself is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e gold belonged to the ownership of the assessee, his right on the valuation date was in jeopardy and mere legal ownership in the seized gold was not enough to fasten wealth tax liability on the assessee in respect of the market value of the seized gold as done by the revenue. He therefore submitted that the market value of the seized gold had to be excluded from the computation of net wealth of the assessee for the respective assessment years and the authorities be directed to return the seized gold to the petitioners. 8. In support of his submissions, Mr. Kamath has referred to and relied on the following decisions of the Supreme Court and Gujarat High Court:- 1. Murari Mohan Dutta Vs. Commissioner of Wealth Tax (1991) SCC Online Cal 323 :: (1993) 200 ITR 226; 2. Commissioner of Income Tax, Bangalore Vs. J.H. Gotla, Yadagiri (1985) 4 SCC 343; 3. Commissioner of Central Excise, New Delhi Vs. Hari Chand Shri Gopal & Ors (2011) 1 SCC 236; 4. Aims Oxygen Pvt. Ltd. Vs. Commissioner of Wealth Tax MANU GJ 1520/2011 :: (2012) 251 CTR (Guj) 19. 8.1. In the case of Murari Mohan Dutta (supra), emphasis is placed on the findings given in paragraph Nos.6, 7, 9 and 10 of the said jud....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d anomaly. We might here mention the observations of the Select Committee on the 'assets stolen, lost or destroyed' which is noted in paragraph 13 of the report and are as follows : 'With regard to the definition of "net wealth", the Committee have noted the assurance given by the Minister of Finance that if any asset referred to in the said definition was lost or stolen or destroyed, it would not be included in computing the net wealth of an asset, provided the same had not been insured and that necessary instructions in this respect would be issued to the authorities concerned'." 10. In our view, a person whose valuable property had been seized could not exercise the right of ownership so far as possession, enjoyment and sale of such property is concerned. There cannot be any market value for such property inasmuch as Section 7(1) provides that the market value shall be estimated to be the price which in the opinion of the Wealth-tax Officer it would fetch if sold in the open market on the valuation date. In view of the aforesaid restriction on the ownership and the goods being liable to confiscation, mere legal ownership will not be enough to fasten liability....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the purpose of a particular provision is easily discernible from the whole scheme of the Act which in this case is, to counteract the effect of the transfer of assets so far as computation of income of the assessee is concerned then bearing that purpose in mind, we should find out the intention from the language used by the Legislature and if strict literal construction leads to an absurd result i.e. result not intended to be subserved by the object of the legislation found out in the manner indicated before, and if another construction is possible apart from strict literal construction then that construction should be preferred to the strict literal construction. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. Furthermore, in the instant case we are dealing with an artificial liability created for counteracting the effect only of attempts by the assessee to reduce tax liability by transfer. It has also been noted how for various purposes the business from which profit is included or lo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. 33. A Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the noncompliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h case, the compensation amount would only be the maximum compensation as provided under the Ceiling Act which is to be taken into consideration." 9. PER CONTRA Mr. Suresh Kumar learned counsel appearing for the respondents has supported the orders dated 22.03.1979 passed by the Wealth Tax Officer, order dated 18.02.1981 passed by the first appellate authority i.e. the Wealth-tax Commissioner (Appeals) and the order dated 19.09.1982 passed by the second appellate authority i.e. the Tribunal and contended that the conclusion by the Tribunal that the appellants / petitioners are not entitled to invoke equity jurisdiction of this Court and that the assessee stood possessed of / owned the seized gold on the respective valuation dates has been correctly arrived at. He submitted that to treat the assessee as not having owned the seized gold on the respective valuation dates cannot be substantiated as the gold was not confiscated so as to deprive the assessee of his legal right in the said gold; it was merely a seizure; therefore submission of the assessee that value of the seized gold has to be considered as 'Nil' asset for computation of Wealth-tax assessment as it was seized p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es between November 18 and 21 November 1964 and large quantity of gold in various forms was recovered and seized. The value of the gold was found to be Rs. 2,83,320/-. Central excise officials seized the gold on 17.12.1964 and proceedings under the Defence of India (Gold Control) Rules, 1963 were initiated against the assessee. The assessee unsuccessfully challenged the seizure of the gold and proceedings against him before the Gujarat High Court and the Supreme Court. On 30.09.1975 Collector of Central Excise, Baroda passed an order of confiscation of the gold under Section 71 of the Gold (Control) Act, 1968 and passed a further order to redeem the confiscated gold on payment of fine of one lakh of rupees and declare the same in the wealth-tax return. In the wealth-tax returns filed for the assessment years 1965-66 to 197273 after return of the gold, the assessee did not include the value of the said gold in his net wealth on the ground that as the gold articles were seized and proceedings were pending, their value as on the relevant valuation dates was 'Nil'. The Wealth-tax Officer rejected the assessee's contention that the value of the gold was 'Nil' on acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rship in the form of seizure did not reduce the value of the gold `if sold in the open market' for the purposes of wealth-tax assessments for the eight years ? Facts giving rise to this reference are as follows : The income tax authorities searched the premises of the assessee known as "Shree Sadan" between November 18 and November 21,1964. In the course of the search, large quantity of gold in various forms was recovered from the strong room in the cellar. The gold which was recovered was in the form of 154 gold coins and 8 gold bars. The value of the gold found was Rs. 2,83,320. The Central Excise officials seized the gold on 17-12-1964. Proceedings under rule 126L(16) of the Defence of India Rules, 1963 (Gold Control) were initiated against the assessee. The assessee unsuccessfully challenged the seizure of the gold and the proceedings taken against him by the Central Excise Department before this court and the Supreme Court. The Collector of Central Excise, Baroda passed the following order against the assessee on 30-09-1975 in the proceedings taken out against the assessee : Therefore, I confiscate the 8 gold bars and 154 gold coins under section 71 of the Gold (Contro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onfiscation, however did not in any way impair the ownership of the assessee of these articles. The assessee continued to be the full owner of the articles son the relevant valuation dates. Mere possibility of confiscation cannot be said to impose legal restriction, limitation or impediment on the ownership of the assessee. Therefore, in our opinion the mere fact that the gold articles in question were liable to be confiscated, does not in any way affect the market value of the articles under s. 7(1) of the Act as urged by Mr. Shah. It was not disputed by Mr. Shah that it is to be assumed that there is an open market and gold articles could be sold in such market, and on that basis the value has to be determined. Seizure of the gold articles also did not in any way affect the ownership of the assessee. It was only a temporary measure, akin to an attachment before judgment. If the gold articles were confiscated, the assessee would have lost his ownership over them, but till that event occurred the assessee continued to be the owner thereof. There cannot be said to be any cloud over the title of the assessee over those articles unless and until they were confiscated. Mr. Shah also di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om the mutawalli. In the year 1957 the Wealth-tax Act came into force. During the assessment years 1957-58 and 1958-59 appellants were not only assessed to income-tax in respect of the income received by them from the wakf estate but were also assessed to wealth-tax by the Wealth-tax Officer on the basis that they had a share in the wakf estate. The total value of the immovable property belonging to the wakf estate was valued at 20 times the annual municipal valuation and 1/6th of the value of the immovable property along with other properties was taken to be the net wealth of each assessee. 10.6. The question of law referred to the High Court under Section 27 of the Act was as follows: "Whether, on the facts and circumstances stated, the right of the assessee to receive a specified share of the net income from the wakf estate is an asset the capitalised value of which is assessable to wealth-tax ?" 10.7. The High Court negatived the contention of the appellants that the right to receive a definite share of the net income from wakf property did not fall within the meaning of the word "assets" as defined by Section 2 (e) of the Act or that it was a mere right to an annuity which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee and exclusively used by him for residential purposes throughout the period of twelve months immediately proceeding the valuation date, may, at the option of the assessee, on the valuation date next following the date on which he became the owner of the house or the valuation date relevant to the assessment year commencing on the 1st day of April, 1971, whichever valuation date is later." 14. In the present case, it is evident that seizure of the gold had taken place on 07.12.1965 and from that date onwards the gold is in the custody of the Collector of Central Excise, Jaipur. The moot question that therefore arises for determination is whether G.S. Goenka i.e. the original assessee was prevented from investing the seized gold in the Gold Bond Scheme and what net value of the gold should be considered on the respective valuation dates for the respective assessment years for the purpose of assessing the value of the gold in the wealth tax returns filed by the assessee. On a reading of the provisions of sub-section (1) of Section 7 of the Wealth Tax Act, appellants have asserted that the value of the gold on the respective dates of valuation for each assessment year is to be ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... It may, incidentally be mentioned that in the case of Smt. Chandra Jalan v. CWT (in Matter No. 378 of 1962) in respect of dividends declared in East Pakistan which the shareholder had the right to get was property within the meaning of the definition of asset in Section 2 (e) of the Act, it was held that in respect of such property, in view of the restrictions in respect of such property, the Wealth-tax Officer was not justified in estimating the value on the face value thereof." 9. We may also refer to the observation of the Division Bench in that case to the following effect (at page 43) : "Counsel for the assessee, in our opinion, was justified in contending that a man who was the owner of movable property like a diamond or jewellery and if that property or goods had been lost due to stealing or theft, even then if the assessee was made liable as the owner of that property and as such liable to pay wealth-tax ad infinitum year after year in respect of that property that would lead to great hardship and anomaly. We might here mention the observations of the Select Committee on the 'assets stolen, lost or destroyed' which is noted in paragraph 13 of the report and ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... despite the order of adjudication dated 03.01.1970 passed by the Collector of Central Excise to invest the gold in the Gold Bond Scheme, the same was not released by the respondents. 17. We are therefore not in agreement with the view expressed by the Division Bench of the Gujarat High Court in the case of Jayantilal Amritlal (supra), which held that since the gold articles in question were liable to be confiscated it does not in any way affect the market value of the articles under Section 7(1) as urged by the appellants therein. 18. We may refer to the order dated 03.01.1970 passed by the Collector of Central Excise, New Delhi passed in C. No. 3-Gold/Seizure/66/49, Order No. 1/1970 under the Gold Control Act, 1968 on adjudication. Perusal of the order narrates the entire facts pertaining to the original assessee i.e C.S. Goenka's case pertaining to the seizure of the primary gold, gold jewellery as well as documents by the Income Tax Officers under panchnama dated 07.12.1965. In the said proceedings, the original assessee C.S. Goenka filed his reply to the show-cause memorandum, requesting for grant of personal hearing and also cross-examination of the witness on whose evi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the party charged 3 days prior to its seizure by the Central Excise Officers under the Gold Control Rules. I hold that Central Excise Officers rightly seized the gold under the Gold Control Rules on 9.12.65 and I declare that the seizure was valid. 15. I concede the plea of the party charged that he had intended to invest their gold in gold bonds. This intention is clearly borne out from the evidence on records. The depositions of Shri. Vanchinath, Income-tax Officer during the course of cross-examination confirm this plea of the party charged. Enquiries made from the employees of the State Bank of Indore also indicate that an attempt was made to put this intention into practice. 16. It is also true that the party charged was not properly guided in the initial stages. Had he discussed this matter with any Gold Control or Central Excise Officer he had talked the matter over with Shri. Vanchinath, Incometax Officer, he would have been completely ex-honerated in these proceedings and also would have been allowed the full benefit of the amnesty granted by the Government to the owners of the Gold. 17. In view of the above mentioned facts, the party charged is entitled to the benef....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Adjudicating Officer in favour of a person, no action would possible to modify such an order as the person concerned would evidently not file any appeal. The law has not left any such vacuum. It is true that unless the person in respect of who order has been passed files an appeal, no ractification of the order would be possible under Section 80 of the Gold (Control) Act. In such an eventuality, however, the remedy would lie in invoking the provisions of Section 81 and Section 82(2) and (3) of the Gold (Control) Act. 17. In the result, I hold that the first contention of Shri. Sorabjee that an appeal in this case can be filed only under Rule 126-M(3) of the Defence of India Rules, and not under Section 80 of the Gold (Control) Act, 1968, is not correct. On the point whether the Income-tax Officer, Section X (Central), Bombay is competent to file an appeal against Order No.1/1970 dated the 3rd January, 1970, passed by the Collector of Central Excise, Delhi, I hold that on the facts of this case, he is not competent to file an appeal against the aforesaid order. The appeal filed by him is, therefore, incompetent and not maintainable under the Gold (Control) Act, 1968. That being so....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e may also usefully extract the observations and findings returned by the Tribunal in its order dated 29.09.1981 which finds favour with the original assessee. The said extract in paragraph 18 reads as under:- ".... We are aware that the situation the assessee finds himself is brought about by the department themselves. It is by their action that the assessee had been deprived of the chance of investing the gold in Gold Bonds and getting the exemption. However, we, with our limited powers, cannot under these circumstances, invoke any rule of equity in favour of the assessee. Perhaps, there are occupational hazards of having taxable assets not disclosed to the department. Such as assessee runs these risks." 21. Applying the ratio in the case of Murari Mohan Dutta (supra), we are inclined to hold in the present case that there cannot be any market value ascribed for valuation of the seized gold on the respective valuation dates in view of the fact that the gold being seized was in the custody of the Central Excise Authorities on the respective valuation dates and the right of the original assessee was in jeopardy. Thus, we do not agree with the findings returned by the Tribunal in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....asis of a notional sale of gold which was not legally possible, the Tribunal ought to have included, if at all, the consideration which any wise and prudent person would have offered for entering into an agreement to purchase the gold subject to the condition that delivery of gold would be given and sale would be completed, if and when the assessee became entitled to and acquired possession of gold ?" Ans. : In view of the answers to the questions (1) to (6) herein above, the Tribunal ought not to have included any consideration for the seized gold for computation of wealth tax assessment on the respective valuation dates as the gold still stands seized and not released. 23. Writ Petition No. 793 of 2005 was filed by Smt. Sushila N. Rungta to challenge the notice dated 22.09.2004 issued for the sum of Rs. 5,01,86,611.00 along with interest being the alleged dues of income tax and wealth tax payable by the estate of Shri. C.S. Goenka (original assessee). Originally the writ petition was filed for the following relief:- "(a) that this Hon'ble Court be pleased to issue a writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, order or direction....
X X X X Extracts X X X X
X X X X Extracts X X X X
....covered by the department from the debtors of late Shri. C.S. Goenka (original assessee); if such credit was given then there would not be any tax dues payable by the estate of late Shri. C.S. Goenka, rather the estate shall be entitled to refund; that the notice of recovery issued is without application of mind and without considering various orders passed by the Adjudicating Authorities and this Court from time to time; the petitioners have challenged the notice of demand pertaining to wealth tax demand in the sum of Rs. 2,07,67,923.00 as being incorrect because the petitioners were never served with any notice of demand under Section 31(2) of the Wealth Tax Act and finally unless and until the amount of wealth tax dues payable is quantified, no such recovery can be made. 25. Respondents in the writ petition have filed affidavit in reply dated 30.06.2005 through L.P. Saigal, TRO-16(2) in the office of the Commissioner of Income Tax, City 16 and contended that all due credits have been given from the amounts directly realized from the borrower of valuable goods, silver utensils, coins etc to the original assessee; with respect to claim of refund of the assessee for the assessment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lding that the will in favour of Sushila N. Rungta was inoperative and Radheshyam was the sole heir as adopted son. This award was challenged by Sushila N. Rungta in the Supreme Court. On 01.12.2000 the Supreme Court held that the award of the learned arbitrator was inoperative and on the basis of the probated will, Sushila N. Rungta was the legal heir of the deceased C.S. Goenka. Therefore, Sushila N. Rungta made an application before the Supreme Court that she be brought on record as the sole heir and representative of the deceased original assessee C.S. Goenka. On 18.07.2008, the Supreme Court was pleased to allow Interim Application No.15/2008 filed by Sushila N. Rungta and brought her name on record as the legal heir and representative of the appellant i.e Shri. C.S. Goenka. 29. The copies of the above orders and the probate however are not on record so as to guide us in considering and directing the amended prayer as sought for by the petitioners. If the petitioners place the certified copies of the aforesaid orders and probate order on record to the satisfaction of the concerned authorities i.e the respondents / department of Income Tax, we direct that the respondents shall....