9911796707
TMI Blog1984 (11) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... and December 31, 1973, respectively. The assessment orders dated February 24, 1979, indicate that the returns of wealth-tax for all these years were filed on June 23, 1978. The Wealth-tax Officer disallowed the assessee's claim in respect of income-tax liabilities observing that the amounts claimed are not admissible in view of the provisions of section 2(m)(iii)(a) and (b) of the Wealth-tax Act, 1957, and that further the liability claimed was not an ascertained liability on the valuation dates. The assessee had claimed deductions pertaining to the income-tax liability as per details given below : ---------------------------------------------------------------------- Asstt. Wealth Dt. of I.T. finally Payments year. returned/ filing determined made wealth of I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 31,279 Nil. 1973-74 6,462 5-1-1976 -------- --------- 99,800 1-3-1976 25,508 Nil. 1974-75 (-)57,340 30-3-1977 -------- --------- 1,21,320 30-3-1977 39,986 Nil. ---------------------------------------------------------------------- The assessee's claim in the differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; Thus, the assessee claimed deduction in respect of income-tax liability in respect of these years to the tune of Rs. 3,05,011. This claim of the assessee was negatived for all these years. The assessee, therefore, filed an appeal before the Appellate Assistant Commissioner of Wealth-tax, who by his consolidated order dated February 26, 1981, dismissed the same. The assessee thereafter approached the Income-tax Appellate Tribunal, Indore, which by its order dated February 12, 1982, also dismissed the same. Thereafter, the assessee submitted an application before the Tribunal with a prayer to refer the following questions of law: " 1. Whether, on the facts and circumstances of the case, the Tribunal was justified and considered that there was no debt outstanding against the assessee on the valuation dates relevant to assessment years 1971-72 to 1974-75 ? 2. Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the different assessment orders passed under the Income-tax Act were irrelevant and, therefore, of no consequence ? 3. Whether, on the facts and circumstances of the case, the Tribunal was correct in interpreting the wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT [1962] 44 ITR 448(All).In Breach Candy Swimming Bath Trust's case [1955] 27 ITR 279, which is a Division Bench judgment of the Bombay High Court, it has been held as under (p. 293) " Now, in our opinion, the real object of making a reference, stating case and raising questions, is to bring out the real controversy between the Department and the assessee, so that the High Court under its advisory jurisdiction can give an opinion on which the Tribunal can act; and there can be no dispute that the High Court has ample jurisdiction to alter and reformulate questions submitted by the Tribunal in order to bring out the real controversy between the parties. Now, what is the real controversy between the parties in this case ? The contention of the assessee is that it is not liable to pay tax on the income derived from certain activities carried on by the trust because the trust is a charitable institution, and the contention of the Department is that this income is not exempt from tax. Therefore, what we have to consider is, looking to the provisions of the Income-tax Act, whether this income is or is not exempt from tax. It is not necessary for the assessee to suggest under what part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the court should reframe the questions deleting the reference to the law not applicable, and answer the substantial question of law that does arise by reference to the law applicable. " The learned counsel for the assessee, therefore, submitted that it is not now necessary for the assessee to approach the Tribunal again requesting it to reframe the question of law as proposed by it on the basis of the real controversy involved herein. He, therefore, submitted that the question referred by the Tribunal, in fact, does not arise as such, but the real question, looking to the controversial facts, is that as proposed by him. On this point, the learned counsel for the Revenue submitted that, no doubt, there is no dispute so far as the questions of fact are concerned, but he submitted that even in a case where out of the questions proposed to be referred to this court only some are referred, even in respect of those questions which have not been referred by the Tribunal, the assessee is required to approach this court again, but the question cannot be reframed in the manner suggested by the assessee. It is not in dispute that under the Wealth-tax Act an assessee is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as framed and referred to it by the Tribunal unless, of course, the question referred did not require to be answered either by reason of the fact that it was merely academic in nature or by reason of the fact that it did not arise out of the Tribunal's order. In some cases, however, the question referred for opinion may be required to be reframed. Therefore, we propose to answer to following question of law: " Whether, on the facts and circumstances of the case, the applicant assessee is entitled to deduction of income-tax assessed after the assessment years in question, for the purpose of computation of her net wealth, on true interpretation of the expression 'debt owed' in section 2(m) of the Wealth-tax Act ? " As regards the merits of the case, there is no dispute that the assessee is entitled to the deduction of income-tax as determined in order to find out the net wealth of the assessee and, therefore, it is a " debt owed ". It is no doubt true that the returns were filed by the assessee after the valuation date, but the time of accrual for the income-tax liability arose not on the valuation date, but the same was quantified at a later date. The learned counsel for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in appeal, revision or other proceeding as not being payable by him. According to its ordinary connotation, the word 'outstanding' means 'though payable but not paid'. When the amount of tax is payable but is not paid, it would be outstanding. " To similar effect is another decision in CWT v. Moon Mills Ltd. [1973] 88 ITR 427 (SC). In the decision in CWT v. K.S.N. Bhatt [1984] 145 ITR 1 (SC), it has been held by the Supreme Court that (headnote): " In computing the net wealth of the assessee for wealth-tax, the liabilities towards income-tax, wealth-tax and gift-tax, which crystallise on the relevant valuation date as determined in the respective assessment orders as liabilities, are to be deducted even though those assessment orders are finalised after the valuation date. The quantification effected by an assessment order may be varied as the income-tax, wealth-tax and gift-tax case is carried in appeal to the Appellate Assistant Commissioner, or thereafter to the Appellate Tribunal, and indeed even in reference later to the High Court or subsequent appeal to the Supreme Court. It is the quantification of the tax liability by the ultimate judicial authority which wil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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