COMMISSIONER OF WEALTH TAX Vs. M RAJAGOPAL

JUDGEMENT

(1.) THESE are all petitions filed by the Commissioner of Wealth-tax, Tamil Nadu-V, Madras, to direct the Appellate Tribunal to state a case and refer the following question of law under section 27(3) of the Wealth-tax Act, 1957."Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in deleting the additions made to the net wealth by the Assessing Officer for the assessment years 1978-79 to 1984-85 ?"The assessment years involved are 1978-79 to 1984-85.

(2.) THE assessee is an individual and was working as a cashier in Cholan Roadways Corporation Limited, Kumbakonam. THE Assessing Officer received certain information from Cholan Roadways Corporation Ltd., that the assessee had misappropriated funds from the Corporation to the tune of Rs. 55 lakhs during the assessment years 1978-79 to 1984-85. On the basis of the information obtained, the Assessing Officer brought to tax the entire amount of Rs. 55, 00, 000 spread over the assessment years 1978-79 to 1984-85, on the ground that the misappropriation of funds was confirmed by the employer-Corporation and the assessee was presumed to be in possession of the funds as his assets. THE assessee filed appeals before the Commissioner of Wealth-tax (Appeals) challenging the aforesaid inclusion representing misappropriated funds from the employer-Corporation.

(3.) THEREFORE, we are of the view that the additions made by the Wealth-tax Officer were based purely on surmises. Further, even if it is found that the assessee had retained embezzled money, under the law, he is liable to return the same. THEREFORE, in the absence of any material to show that the assessee had been found guilty of embezzlement and in the absence of any evidence to show that the assessee had some assets of any kind, the Appellate Tribunal came to the correct conclusion that the addition made by the Wealth-tax Officer was not justified in law. That apart, we hold that even if the amount is said to be embezzled, the assessee is duty bound to return the money to the employer-Corporation. Hence, the market value of the embezzled money would be "nil" in the hands of the assessee on the relevant valuation dates. We are of the opinion that the Appellate Tribunal, has come to the correct conclusion in holding that the additions made by the Wealth-tax Officer were not correct.