TMI Blog1996 (8) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... eet was not an admissible deduction for valuation of the shares of a company under rule 1D of the Wealth-tax Rules? 2. Whether, in view of the decisions of the Supreme Court in Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559 and Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585, the Tribunal ought to have held that the decision of the Kerala High Court stood overruled and gratuity liability actuarially determined is a 'debt owed' and was an admissible deduction?" Reading these questions it would be clear that the first one relates to the grautity liability shown in the balance-sheet, whether it is admissible deduction for valuation of the shares of the company under rule 1D of the Wealth-tax Rules and the second one, has a facet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it represents a contingent liability or whether it represents an existing ascertained liability. We have taken the view that this is matter which should be considered independent of the provisions of the concerned taxation statute, whether it is the Wealth-tax Act, Income-tax Act or any other allied enactments, even if that question arises under any of the said enactments. We have taken into consideration all the reported decisions. Illustratively, we have referred to the decision of this court in CWT v. K. Gopinathan Nair [1976] 103 ITR 23. We have also considered the decisions of the Supreme Court in Standard Mills Co. Ltd. v. CWT [1967] 63 ITR 470 and Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559. We have observed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he consequential benefit. In fact, following the decision of the apex court in Vazir Sultan Tobacco Co. Ltd. v. CIT [1981] 132 ITR 559, a definite view is expressed that the provision for payment of gratuity made on the basis of actuarial valuation is an existing liability and that it is a liability in praesenti, though the payment of the said amount is at a future date. The factual matrix leading to the questions referred is the same although the earlier decision dated March 29, 1996 (see [1997] 224 ITR 34), related to the proceedings under the Estate Duty Act whereas the present proceedings relate to the Wealth-tax Act. We have considered and held that the problem of determination of the character of the liability is irrespective of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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