Rajpal Yadav, J.M. - (1.) THE present nine appeals have been directed at the instance of the assessee against the orders of the learned CWT(A) passed in asst. yrs. 1993-94 to 1997-98. Out of these 9 appeals, two have been preferred against the orders vide which the assessee has been appointed as an agent of Haresh Kumar Mansukhlal Pala and Smt Urmilaben H. Nanda under Section 22 of the WT Act. Rest of the 7 appeals relate to assessment of the assets.
(2.) We heard Deepak Rindani, learned counsel for the assessee, and Shri Baby Mathew, learned Departmental Representative for the Revenue. The facts leading to appointment of an agent and levy of wealth-tax are well set out in the orders of the Revenue authorities below. Nevertheless, we think it necessary to recapitulate the basic matrix though not in detail in order to enable us to give our own reasoning for the finding which we will be arriving at. Thus, the brief facts are that the assessee, Ashok Kumar Mathuradass Zinzuvadia, is a proprietor of M/s Radhika Jewellers, Rajkot, and carried on business of gold ornaments. A search and seizure operation was carried out on the residential and business premises of the assessee on 16th of November, 1995. During the search, statement of the assessee was recorded under Section 132(4) of the Act and he disclosed an unaccounted income of Rs. 75 lakhs, However, while filing the return for the block period, the assessee disclosed the income of Rs. 26,66,559. The assessment for the block period was completed on 19th Nov. 1996, thereby determining the total income at Rs. 29,76,934. During the search unaccounted gold was found for which the assessee made disclosure in his statement under Section 132(4) of the Act. However, later on he explained that out of these gold, 10,255 gms. belongs to two non-resident Indians, namely, Haresh M. Pala and Smt. Urmilaben H. Nana. Haresh Kumar residing at Sharjah came to India and brought with him gold weighing 4,996 gms. Similarly, Smt. Urmilaben handed over gold of 5,259 gms. to the assessee. It was contended by the assessee that this gold ornament was credited in the stock register of the assessee as a loan taken from the above two persons. In support of his contention the assessee filed a copy of the agreement executed between him and the alleged two persons. In the block assessment the AO accepted the contention of the assessee and did not make any addition qua the gold amounting to 10,255 gms. However, for the purpose of WT Act the AO noticed that Ashok Kumar, the assessee, had accepted the gold weighing 10,255 gms. of Haresh Kumar Pala and Smt. Urmilaben, The value of this gold exceeded Rs. 15 lakhs. Since this asset is in the taxable territory of India and both these loaners were liable to pay wealth-tax on the value of this asset, the asset was brought in India in March, 1995, by Shri Hareshkumar and somewhere in January, 1993, by Smt. Urmilaben, hence, this asset must be subjected to tax from the asst. yr. 1993-94 onwards in the case of Smt. Urmilaben and from asst. yr. 1995-96 in the case of Shri Haresh Mansukhlal Pala.
(3.) SINCE the owners of the assets are non-resident, the AO, therefore, proposed action under Section 22 of the WT Act. Applying Sub-section (2) of Section 22, he issued a show-cause notice to the assessee, Ashok Kumar, by letter, dt. 1st Dec., 1997, holding that he was in possession of an asset taxable in India and must be treated as the agent of the owner of this asset, Haresh Kumar Pala, for the purpose of charging wealth-tax and recovered the same from him on behalf of the said Haresh Kumar. Similar notice was given for the gold of Smt. Urmilaben.;