DIPTI KUMAR BASU Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) The following questions of law of great importance are involved in this reference under Section 27(1) of the Wealth-tax Act, 1957, hereinafter stated as the " Act" :

(2.) The assessment year is 1964-65, and the valuation date is March 31, 1964. M/s. Om Dignam & Co., a firm of solicitors, is hereinafter stated as the "firm" The assessee is a partner of the firm. The firm maintains its books on cash basis. The firm is entitled to get costs from its clients and has submitted the bills to them. In the assessment year, the firm did not include in its balance sheet these unrealised sums, hereinafter stated as the "outstandings". The Tax Officer has included them in the balance sheet on the ground that these outstandings are the assets of the firm and arc includible in the computation of the net wealth of the assessee and on estimate, has determined the assessee's share in these outstandings at Rs. 2,50,000.

(3.) The Appellate Assistant Commissioner, on appeal by the assessee, has directed the Tax Officer to determine the assessee's share in the net wealth of the firm, under Rule 2 of the Wealth-tax Rules, 1957, by taking these outstandings into account in accordance with the percentage determined by him. And, save as to certain matters, the Appellate Tribunal has affirmed the decision of the Appellate Assistant Commissioner and has also passed an order under Section 35 of the Act with which we are not concerned.