COMMISSIONER OF WEALTH TAX Vs. SHIVRAM SINGH

JUDGEMENT

(1.) AT the instance of the CWT, Bihar, the Tribunal has under S. 27 of the WT Act, 1957, referred the following question of law for the opinion of this Court:

(2.) THE assessee is an individual. The assessment year in question is 1965 -66, for which the relevant valuation date is 4th Nov., 1964. The said sum of Rs. 15,20,000 is a portion of the total assets voluntarily disclosed by the assessee under S. 68 of the Finance Act, 1965. The disclosure was made on 31st May,1965, that is, later than the said valuation date. The break -up of the total assets disclosed was as under: The assessee paid income -tax on the voluntarily disclosed income in terms of S. 68 of the said Finance Act. Consequent upon the said voluntary disclosure, proceedings under S. 17(1)(a) of the

(3.) IT will immediately be noticed that the Gujarat High Court was seized with a question which was different in nature from the question which has been referred to us in the instant case. The deduction of the amount of tax which has been allowed as per the Tribunal's order is not at the rate prescribed under S. 68 of the said Finance Act, but is restricted to the amount that would be payable on the basis of the Finance Act for the relevant assessment year. Such deduction has been allowed on the ground that it is a debt owed in terms of S. 2(m) of the Act. Therefore, the only question which requires to be considered is, whether the income -tax payable on the value of the said asset is deductible at the rate prescribed under the relevant Finance Act. On this question learned standing counsel for the Department has argued that the value of the assets disclosed under the Voluntary Disclosure Scheme cannot be earmarked for the particular financial year or years and, consequently, the tax liability on it being unascertainable, the deduction allowed was illegal. The argument, to my mind, is untenable. "Wealth -tax" is a tax on net wealth. "Net wealth" has been defined in S. 2(m) of the Act to mean "the amount by which the aggregate value computed in accordance with the provisions of this Act of all assets, wherever located, belonging to the assessee on the valuation date, including the assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date ......" There are certain exceptions to it which are not relevant to be quoted, because they do not affect this case. Evidently, by this definition only that part of the gross wealth is to be taxed to wealth -tax which is left in the assessee's hands after deducting the debts owed on it.