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TMI Blog1970 (12) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... nce will govern all the other references. The assessee, Vijay Kumar Behal of Ludhiana, was a partner in Messrs. Pearl Hosiery Mills and Messrs. Pearl Woollen Mills, Ludhiana. The Income-tax Officer found during the assessment proceedings for the years 1959-60 and 1960-61 that the said firms had undervalued their stocks and thereby concealed their income. It was also found that the said concealed income had been introduced in the books of account in the form of hundi loans which in fact were fictitious. Ultimately, the firms surrendered the concealed income for assessment. These assessments were completed in July, 1956. For the assessment years 1959-60 and 1960-61, the assessee's share of the concealed income of the firms was included in hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad, in its balance-sheet for the year ending March 31, 1957, shown a certain amount as provision for payment of income-tax and super-tax in respect of that year of account. The question was whether that amount was a 'debt owed' within the meaning of section 2(m) of the Wealth-tax Act, 1957, as on March 31, 1957, which was his valuation date, and as such deductible in computing the net wealth of the appellant-company. Subba Rao J. (as he then was), delivering the majority judgment of the court, held that the word 'owe' meant to be under an obligation to pay, that it did not really add to the meaning of the word 'debt' and that 'debt owed' within the meaning of section 2(m) could be defined as the liability to pay in present or in future an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove decision of the Supreme Court, we hold that the assessee is entitled to deduction of tax payable on concealed income assessed for the year under consideration. " The Commissioner of Wealth-tax being dissatisfied with the order of the Tribunal applied under section 27(1) of the Wealth-tax Act, 1957, praying that the following question of law be referred for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the determination of the assessee's net wealth, the assessee was entitled to deduction of income-tax payable by him on the concealed income included in his wealth ? " This application was allowed and the aforesaid question of law has been referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, that " the tax liability at the latest will arise on the last day of the accounting year ". On parity of reasoning, therefore, the decision in H. H. Setu Parvati Bayi v. Commissioner of Wealth-tax will fully cover the present case. What has been stated above can be supported on the basis of section 2(m) of the Wealth-tax Act. Section 2(m) is quoted below for facility of reference and, on its true interpretation alone, the decision of the Tribunal must stay : " 2. (m) In this Act, unless the context otherwise requires- 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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