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1985 (3) TMI 2

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..... ences under s. 27(1) of the W.T. Act, 1957, have been made by the Income-tax Appellate Tribunal, Cuttack Bench, at the instance of the Commissioner of Wealth-tax, Orissa, for the opinion of this court on the following question of law: " Whether, on the facts and in the circumstances of the case, the Wealth-tax Officer was in law justified in including in the net wealth of the assessee interest due on accrual basis (though not realised) on the outstandings of the money-lending business, the accounts of the assessee being maintained on cash basis?" The respondent assessee was assessed to wealth-tax for the assessment years 1965-66, 1966-67 and 1967-68 (the respective valuation dates being March 31, 1965, March 31, 1966, and March 31, 1967 .....

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..... the net wealth of the assessee on the corresponding valuation date. The expression " net wealth " is defined by cl. (m) of s. 2 of the Act as " the amount by which the aggregate value ...... of all the assets, wherever located, belonging to the assessee on the valuation date ...... is in excess of the aggregate value of all the debts owed by the assessee on the valuation date...... " According to the scheme of the W.T. Act, the net wealth of an assessee has to be determined as it obtains on a particular date. That is the It valuation date ". Clause (q) of s. 2 defines the expression " valuation date " as follows: " (q) valuation date in relation to any year for which an assessment is to be made under this Act, means the last day of the .....

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..... is an obvious advantage in adopting as the valuation date the last day of a period which is also the relevant period under the I.T. Act. The reasons for defining the valuation date in terms of the last day of the income-tax " previous year " stop there. The system of accounting, mercantile or cash or hybrid, is of no relevance for the purpose of determining the assets of the assessee. That appears to be plain from the definition of "net wealth" which speaks of "the aggregate value ...... of all the assets" belonging to the assessee on the valuation date. All the assets of the assessee, barring those expressly excepted by the statute, are to be taken into account, and it is immaterial whether the assessee employs one system of accounting or .....

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