ORDER
P.K. Ammini, Judicial Member
1. These appeals by the assessee relate to the assessment years 1984-85 and 1985-86, for which the relevant valuation dates are 31-12-1958 (M.E.) and 31-12-1959 (M.E.), respectively. Since issues involved are common, we make it convenient to dispose of the appeals by a common order.
2. The assessee is an individual and is a partner in M/s. P.P. Chandrasekhara Pai & Sons, Ernakulam. For the above assessment years, the assessee did not include the value of 3582 grams of jewellery and gold seized from him by the Central Excise authorities on the ground that the seized assets were not in his possession and that the same may ultimately be forfeited to Govenment. But the Wealth-tax officer did not accept the contention of the assessee for the reason that the assessee has not chosen to disown the ownership of the jewellery and was trying his best to get back the seized assets. The Wealth-tax Officer, therefore, completed the assessments for the two years under appeal including the value of the seized items of gold and jewellery and the value of other immovable properties. The assessee appealed against the inclusion of the value of the property at Kranganoor having an extent of 9.5 cents and the value of the gold jewellery and gold seized by the Central Excise authorities. The Appellate Assistant Commissioner found that the Kranganoor property was sold by the assessee during the earlier year and the assessee was not the owner of the property on the relevant valuation dates. He accordingly deleted the value of the Kranganoor property. Regarding the value of 9.5 cents the assessee contended before the Appellate Assistant Commissioner that the value of Rs. 1,000 offered in 1983-84 was accepted by the Wealth-tax Officer and in estimating the value at Rs. 5,000 the Wealth-tax officer had not given any data. The Appellate Assistant Commissioner came across some cases where the rates varied from Rs. 3,000 to Rs. 4,000 per cent and bearing this in mind, he estimated the value of the above 9.5 cents of lands at Rs. 3,500 per cent. In respect of the gold and gold jewellery seized by the Central Excise Authorities. The Appellate Assistant Commissioner noticed that the relevant assessment years were 1984-85 and 1985-86 for which the accounting years ended on 16-8-1983 and 16-8-1984 that the order of the Collector of Customs was dated 13-1-1984 and as on 16-8-1983 there was no order of confiscation by the Collector of Customs, Cochin and that the assessee should have taken some steps to reduce the quantum of redemption amount or get back the gold articles. As no finality had been reached and since the gold and gold jewellery had been treated as belonging to the assessee, the Appellate Assistant Commissioner held that as on the relevant valuation dates the value of the jewellery in question had to be included as wealth of the assessee. Against this order of the Appellate Assistant Commissioner, the assessee has preferred these second appeals.
3. At the time of hearing the appeals, the first ground regarding the value of the land was not pressed. Hence the ground for the two years is dismissed and the finding of the Appellate Assistant Commissioner regarding the valuation of the land is confirmed.
4. In respect of the value of seized gold and gold jewellery it was contended for the assessee that the Collector of Customs had, in fact, absolutely confiscated the above items, that the Customs, Excise and Gold (Control) Tribunal had held that the jewellery and gold are liable to confiscation and had only given the assessee an option to redeem the same on payment of a fine, that on the relevant valuation dates the jewellery and the gold were under the control and custody of the Gold Control Authorities, having been seized. In the absence of adjudication the items in the custody of the Customs Department has not value and hence the market value should be taken as nil. The assessee also contended that the gold and jewellery had not been released during the relevant period and consequently, the inclusion of the value of the jewellery and the gold as part of the net welath is erroneous and that in any event the redemption fine ought to be treated as liability if the value of the items are taken as wealth. The departmental representative, on the other hand, supported the view of the Appellate Assistant Commissioner.
5. We have considered rival submissions. The fact that the officers of the customs authorities searched the residence of the assessee on 23-12-1982 and 24-12-1982 and seized gold and gold jewellery is not in dispute. By the order dated 13-1-1984, the Collector of Customs, Cochin imposed penalties on the assessee under various sections of the Customs Act and ordered to confiscate the gold and gold ornaments absolutely under Section 113 of the Customs Act, 1962 and Section 79 of the Gold (Control) Act, 1968. The assessee filed an appeal against the order of the Collector of Customs before the Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench at Madras. The said Tribunal by its order dated 1-8-1986, modified the order of confiscation in respect of the primary gold coins, gold ingots etc. and permitted redemption of the same by the assessee on payment of a fine of Rs. 3,50,000. The Tribunal held that the assessee shall exercise the option within two months after the receipt of the Tribunal’s order and convert the primary gold into ornaments within four weeks and thereafter report compliance of the same to the Collector of Customs, Cochin, failing which the gold coins and standard gold bars etc., would be liable for confiscation. In this background the question that arises is whether the assessee was the owner of the assets on the relevant valuation dates for the two assessment years in question. As stated earlier, the valuation dates tor the assessment years under consideration are 16-8-1983 and 16-8-1984. While the order of the Collector of Customs was passed on 13-1-1984, confiscating the seized items, as also the order of the Customs, Excise and Gold (Control) Appellate Tribunal, South Regional Bench at Madras, was passed on 1-8-1986, there was no order for confiscating the seized goods on the valuation date, viz., 16-8-1983 though the assessee was not in possession of the seized gold and gold ornaments. Therefore, the assessee was the owner of the seized assets as on 16-8-1983 and the value of which is to be included in his net wealth for the assessment year 1984-85. However, the assessee was not the owner of these impugned items on the valuation date, viz., 16-8-1984 as the gold ornaments and jewellery which were seized and were confiscated by the Collector of Customs and Excise by his order dated 13-1-1984. Confiscation means appropriation to the treasury. By the order of confiscation the assessee has been divested of ownership in the goods. Therefore, the value of the same cannot be included in his net wealth as on 16-8-1984. The learned departmental representative argued that ultimately the assessee was allowed to redeem the confiscated items and therefore he should be deemed to be the owner of the confiscated items as on 16-8-1984. We reject the argument of the learned departmental representative because the right of redemption arose for the first time only on 1-8-1986 by the order of the Gold Control Appellate Tribunal of even date which was beyond the relevant valuation date for the assessment year 1985-86. We, therefore, uphold the order of the Appellate Assistant Commissioner for the assessment year 1984-85 and set aside the order for the assessment year 1985-86 on this point.
6. In the result, the appeal for the assessment year 1984-85 is dismissed while the appeal for the assessment year 1985-86 is allowed only in part.