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TMI Blog1982 (2) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. 3. That the learned AAC ought to have applied the decision of their Lordships of the Gujarat High Court in the cases of CWT v. Kantilal Manilal [1973] 88 ITR 125 and CWT v. Jayantilal Amratlal [1976] 102 ITR 105. He ought to have considered that the process of assessment is a process of quantification of tax liabilities and tax so finally determined, though much after the valuation date, is legally allowable as debt owed within the meaning of section 2(m) of the Act. 2. All the four appeals are against a consolidated order. The parties, facts and circumstances and the issue involved are common. For the sake of convenience, therefore, we propose to dispose of all the four appeals by this single order. 3. The appellant-assessee is a resident individual/citizen of India and the assessment years involved are 1971-72 to 1974-75. The relevant valuation dates are 31-12-1970, 31-12-1971, 31-12-1972 and 31-12-1973, respectively. A perusal of the assessment orders dated 24-2-1978 shows that the returns of wealth were filed on 23-6-1978. The learned WTO, Shri G.W. Sane, disallowed the assessee's claim in respect of tax liabilities observing that the amounts claimed are not admissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. CWT [1970] 77 ITR 583 (All.). The learned AAC confirmed the assessment orders with the following observations : "In the case of the appellant, the relevant income-tax returns were filed for the assessment years 1970-71 to 1972-73 on 24-2-1975, for 1973-74 on 5-1-1976 and for 1974-75 on 30-3-1977. In this context it would be relevant to mention that in the income-tax assessment order dated 1-3-1976 for the assessment year 1973-74, it is clearly stated that the return was filed by the assessee on 5-1-1976 and he claimed to have filed original return on 12-6-1973 vide acknowledgement No. 1385, but it was found that on said date, i.e., 12-6-1973, some other Dak was filed by some other person, which is evident from the income-tax receipt register and, therefore, the ITO concluded that the return for the assessment year 1973-74 is filed on 5-1-1976. Similarly, for the assessment year 1974-75, the ITO in his order dated 30-3-1977 has said that the return was received on 30-3-1977 and no verification of the assessee's claim of the original filed on 27-7-1974 could be made. Thus, according to the appellant himself, these income-tax liabilities accrued and arose much beyond the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utstanding". 10. The rival arguments have been heard and consolidated impugned order examined in the light of grounds of appeal and assessment orders. The assessee filed the return of income-tax on 24-2-1975, 5-1-1976 and 30-3-1977 and the assessments were framed on 8-3-1977, 23-3-1978, 1-3-1976 and 30-3-1977 for the assessment years 1971-72, 1972-73, 1973-74 and 1974-75, respectively. The relevant valuation dates are 31-12-1970, 31-12-1971, 31-12-1972 and 31-12-1973, respectively. The assessee made the claim before the learned WTO under section 2(m)(iii)(a) and (b). For proper appreciation of the said provision, the relevant portion is reproduced as below: "(m) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than--- (i) debts which under section 6 are not to be taken into account; (ii) debts which are secured on, or which have been in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falls within the description given in section 2(m)(iii)(a) of the Wealth-tax Act, 1957, it would not be deductible even though it is a debt owed by the assessee on the relevant valuation date. This clause lays down two requirements : one is that the amount of tax payable in consequence of any order passed under or in pursuance of any of the fiscal statutes there specified including the Wealth-tax Act must be outstanding on the relevant valuation date and the other is that it must be claimed by the 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. In Doorga Prosad V. Secretary of State [1945] 13 ITR 285, the Judicial Committee of the Privy Council held that the amount of income-tax determined by the order of assessment became payable only when the notice of demand is issued to the assessee. The scheme of the Wealth-tax Act is in material respects identical with that of the Income-tax Act so far as charge, assessment and levy of tax are concerned and what the Judicial Committee has said in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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