COMMISSIONER OF WEALTH TAX Vs. RAGHUNATH A

JUDGEMENT

(1.) FOR the assessment year 1972-73, the assessee was assessed to wealth-tax on October 27, 1973, on a net wealth of Rs. 2,56,943. The relevant valuation date for the said assessment year is March 31, 1972. While completing the assessment, the WTO disallowed the assessee's claim for deduction in a sum of Rs. 1,39,703, being the income-tax liability for the assessment years 1968-69 and 1969-70. The assessee's claim was that the demand notice for the said amount was served upon him on March 28, 1972, and, therefore, the said amount should be deducted under sub-clause (iii)(a) of the definition of "net wealth" contained in clause (m) of s. 2 of the W.T. Act. This claim was rejected by the WTO on two grounds, viz., (i) that no provision for the said debt has been made in the balance-sheet as on March 31, 1972, and (ii) that the assessee has been disputing the said liability even from the beginning of the income-tax assessment proceedings. On appeal, the AAC agreed with the view taken by the WTO; but, on further appeal, the Tribunal held that, inasmuch as on the relevant valuation date, the demand for the said amount of income-tax was outstanding, it has to be deducted from out of the aggregate value of all the assets, as per the definition of the expression "net wealth". The Tribunal observed further that the mere fact that the assessee filed an appeal subsequent to the relevant valuation date, does not affect the matter.

(2.) WE are of the opinion that the view taken by the Tribunal is in accordance with law. The definition of "net wealth" in clause (m) of s. 2 reads as follows :