TaxTMI 
TaxTMI 
1973 (5) TMI 7
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Wealth-tax Act and was as such to be excluded from the net wealth of the assessee ? " The reference arises out of the wealth-tax assessment made on the assessee-company for the assessment years 1957-58, 1958-59 and 1959-60, the relevant valuation dates being the last day of the calendar years 1956, 1957 and 1958. In the course of assessment proceedings before the Wealth- tax Officer the assessee's representative claimed, inter alia, that the provisions for pension as shown on the liabilities side of the balance-sheet drawn as on the above relevant valuation dates should be deducted in computing the net wealth as defined in section 2(m) of the Wealth-tax Act, 1957, read with section 7(2) of the said Act, which provided that in the case o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of service or exceeded the age of 45 years, and (c) amount payable as pension to persons who had not completed 15 years of service. The Tribunal was of the opinion that the last two categories although comprised of wealth set apart for payment of pension, still the assessee was not to make the payment immediately and, as such, it was not a debt solvendum in praesenti. These two categories of provisions in respect of pension, therefore, according to the Tribunal, could not be excluded from the net wealth of the assessee and reliance was placed by the Tribunal on the decision of this court in the case of Kesoram Cotton Mills Ltd. v. Commissioner of Wealth-tax. With regard to, however, the pension payable to persons who had already retired th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rectors eligible to the benefit of such scheme and for such employees of the company on its covenanted staff as may thereafter be engaged, who by the terms of their employment were declared eligible to the benefit of such scheme upon and subject to the terms and conditions mentioned, namely : " (a) Every employee entitled to the benefit of the pension scheme shall be paid a pension as from the date of termination of his service provided he shall have served the company for a continuous period of not less than 15 years or have attained the age of 45 years. (b) No pension will be paid to any employee who is dismissed for dishonesty or misconduct. (c) The pension payable to any employee who shall become entitled to the same shall be such an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nst the company. Therefore, in respect of the pension to these persons the company had on the relevant valuation dates a liability to pay pension in praesenti to these persons. Therefore, the provision made for this contingency was a debt owed within the meaning of section 2(m) of the Wealth-tax Act, 1957. Reliance was placed, however, by counsel for the revenue on the decision of the Supreme Court in the case of Standard Mills Co. Ltd. v. Commissioner of Wealth-tax. There in the assessment to wealth- tax the assessee had claimed that in computing its net wealth a certain estimated amount should be deducted on account of liability for gratuity to its workmen and staff in accordance with certain awards of the industrial court and the labour ....