V T VENKATESWARAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question of law has been referred by the Tribunal for our consideration under s. 27(1) of the WT Act, 1957:

(2.) THE assessee is an individual and in the wealth -tax proceedings for the asst. yr. 1973 -74, the assessee claimed that the income -tax and wealth -tax should be deducted as debt owed by the assessee on the valuation date. The assessee had claimed a deduction of a sum of Rs. 39, 979 being the estimated wealth -tax liability for the asst. yr. 1973 -74 as on the valuation dt. 31st December, 1972. The WTO allowed the deduction of Rs. 64, 400 as wealth -tax liability based on the assessed net wealth for the asst. yr. 1973 -74. The WTO, however, in the order of assessment passed by him determined the wealth -tax payable for the assessment year at Rs. 64, 848.

(3.) THE Revenue carried the matter in appeal to the Tribunal and the Tribunal found that the provisions of s. 2(m)(iii) of the Act are attracted and the assessee would be entitled to deduction of the wealth -tax on the returned figure and the CWT(A) was not correct in holding that the deduction should be on the amount of wealth -tax determined in the order of the WTO. There was a miscellaneous application filed before the Tribunal by the assessee pointing out that on the basis of the decision of the Supreme Court in Kesoram Industries and Cotton Mills Ltd. vs. CWT the assessee is entitled to deduction on the tax liability as determined by the WTO as debt owed on the valuation date. The Tribunal, however, held that there is a conflict of view among the Supreme Court and, therefore, it felt that the matter should be referred to this Court. Accordingly, at the instance of the assessee, the question of law mentioned earlier has been referred to us.