9911796707
|
Home
Issues:
1. Deduction of tax liability under section 2(m) of Wealth Tax Act. Detailed Analysis: The judgment by the Appellate Tribunal ITAT Pune involved the issue of whether the tax liability of an individual, who disclosed income under section 18B of the Wealth Tax Act, could be deducted as a debt owed on the valuation date. The assessee, engaged in foodgrains trading, disclosed cash in hand and sought to spread it over eight years. The CIT directed assessment of income for certain years and treated the same amount as part of wealth. The WTO rejected the claim for deduction of income-tax liability, citing a previous case under a different Act. The AAC allowed income-tax liability for one year but rejected it for subsequent years, leading to an appeal. The Tribunal considered the arguments presented by both parties. The key question was whether the tax liability on the disclosed income should be ignored when determining the wealth. The Tribunal referred to a Supreme Court decision stating that tax payable on undisclosed income is still a tax on income. It found no reason to ignore the tax liability, especially since the disclosure covered multiple assessment years. The Tribunal concluded that the tax liability should be allowed as a deduction under section 2(m) of the Wealth Tax Act for the relevant assessment years, overturning the lower authority's decision and allowing the appeals. Overall, the judgment clarified that tax liability on disclosed income should not be disregarded when assessing wealth under the Wealth Tax Act. The Tribunal emphasized the importance of considering tax liability as a debt owed on the valuation date, especially when the income disclosure spans multiple assessment years. The decision highlighted the consistency in treating tax liability across different assessment years and underscored the relevance of legal precedents in determining such deductions under the Wealth Tax Act.
|
