KHIMJI HUNSRAJ Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) In this reference under Section 27(1) of the Wealth-tax Act, 1957, for the assessment year 1978-79, the following two questions have been referred to this court ;

(2.) The facts are that the Wealth-tax Officer, in his assessment, valued the interest of the assessee in the partnership, Messrs. East Coast Agency, as per computation in annexure "A" assessment order. In that annexure, the Wealth-tax Officer (adjusted) the tax provision by the amount of advance tax appearing (in) the balance-sheet. He proceeded to compute the value of the interest of the assessee accordingly.

(3.) The assessee took up the matter before the Appellate Assistant Commissioner and contended that, according to the rules, adjustment was not necessary and that the provision for taxation was not a contingent liability nor for meeting any future liability. Reference was made to the decision of the Supreme Court of India in the case of Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767. He directed the Wealth-tax Officer not to make the adjustment and to compute the value of the interest of the assessee accordingly.