1976 (12) TMI 5 - SC - Wealth-tax

Debt Owed - Date of Valuation - Whether the provision of Rs. 49 19,520 made by the assessee for its tax liability less the amount of the last installment of advance tax constituted a debt owed by the assessee within the meaning of clause (m) of section 2 of the Wealth-tax Act on the relevant valuation date - question is answered ion favour of assessee - assessee s appeal is allowed

Summary

The Supreme Court allowed the appeal in a case regarding the deduction of a provision for tax liability in the computation of net wealth. The High Court's decision in favor of the revenue was overturned based on a previous Supreme Court decision in the case of Assam Oil Co. Ltd. The Supreme Court held that the provision for tax liability constituted a debt owed by the appellant and was deductible in computing net wealth. The appeal was accepted, and the judgment of the High Court was set aside.