TMI Blog1983 (3) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... that the income-tax liability of Rs. 5,88,000 under section 68 of the Finance Act, 1965, was a debt 'owed' on the relevant valuation date that is, 15-11-64, (63 ?) and on that basis in allowing the same as deduction in the computation of the assessee's net wealth ? The assessee is an individual. The case relates to the assessment year 1964-65. The WTO passed an order on August 31, 1970, under s. 17 of the W.T. Act, 1957, bringing to tax the value of premium prize bonds worth Rs. 9,80,000. The assessee claimed before the WTO that in the recomputation of his net wealth, a sum of Rs. 5,88,000 being the income-tax liability attributable to the additional sum of Rs. 9,80,000 brought into tax under s. 17 should be deducted as a debt owed by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 9,80,000. The assessee claimed the tax of Rs. 5,88,000 payable on the said Rs. 9,80,000 as deduction from the computation of net wealth. The question before us is whether this claim was rightly allowed by the Appellate Assistant Commissioner. We find conflicting views of the High Courts on this question. Thereafter, a reference was made to the cases of C. K. Babu Naidu [1971] 82 ITR 410 (Ker), Vijay Kumar Behal [1971] 81 ITR 202 (P H) and numerous other decisions. The Tribunal, after carefully considering the issue involved, followed the decision in the case of Vijay Kumar Behal. The Tribunal accordingly held that the AAC rightly allowed the income-tax payable on the disclosed wealth as a deduction in the computation of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by him under s. 68 of the Finance Act, 1965. The view is further fortified by a decision of the Supreme Court in the case of Ahmed Ibrahim Sahigra Dhoraji [1981] 129 ITR 314, wherein it was held that the declaration made under s. 68 of the Finance Act 1965 was dependent upon the volition of the declarant and that the liability to tax on the amount mentioned therein was contingent upon the willingness of the declarant to disclose the amount made no difference. Any such voluntary disclosure by an assessee, even in the absence of s. 68 would have exposed him to an assessment or reassessment, as the case may be, being made in respect of the sum disclosed as part of the income of the relevant assessment year and with additional liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Gujarat High Court in the case of CWT v. Ahmed Ibrahim Sahigara [1974] 93 ITR 288. That decision of the Gujarat High Court was reversed by the Supreme Court in [1981] 129 ITR 314. We accordingly find that the Tribunal was perfectly justified in law in holding that the income-tax liability of Rs. 5,88,000 under s. 68 of the Finance Act was a debt owed on the relevant valuation date, that is, November 15, 1963, and on that basis the allowance of the same as deduction in the computation of the assessee's net wealth was fully justified. We accordingly answer the question referred to us in the affirmative, in favour of the assessee and against the Department. The assessee shall be entitled to his costs. Hearing fee is assessed at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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