COMMISSIONER OF WEALTH TAX Vs. KANTILAL MANILAL

JUDGEMENT

(1.) THESE references raise a common question of law for determination and it would, therefore, be convenient to dispose them of by a single judgment. The question of law which arises for determination may be broadly stated as follows :

(2.) WHAT would be the quantum of the liability, where the assessment to income tax, wealth tax or gift tax is rectified by the Revenue authorities under S. 35 of the Indian IT. Act, 1922, or S. 154 of the IT Act, 1961, before the assessment to wealth tax is finalised ? Would the amount of the tax as rectified be deductible in computing the net wealth or the amount of the tax originally assessed or computed on the basis of the return ? So also, where assessment to income tax, wealth tax or gift tax is reopened and fresh assessment is made under S. 34 of the Indian IT Act, 1922, or S. 147 of the IT Act, 1961, before the final completion of the wealth tax assessed, what would be the amount of the tax deductible ? Would it be the amount of tax as reassessed or as originally assessed or according to the return ? These three different aspects of the question arose for consideration in the references before us : the first, in WT. Ref. Nos. 3, 4, 20, 25, 32, 33 and 36 of 1970 and 1 of 1971 ; the second, in WT. Ref. No. 29 of 1970 ; and the third, in WT. Ref. Nos. 25, 32 and 33 of 1970. Each aspect involves a pure question of law and it is, therefore, not necessary to state the facts giving rise to any of these references. We may straightaway proceed to consider the question of law arising in each of these three groups of references.

(3.) THESE decisions also establish, said the Supreme Court :