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TMI Blog1968 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 2(m)(iii)(a) of the Wealth-tax Act, 1957, the income-tax liability of Rs. 5,53,370 is a debt which could be allowed as a deduction in the computation of the assessee's net wealth on the valuation date in question, i.e., December 31, 1956 ? " The facts giving rise to this reference are as follows : The assessee is a public limited company. The assessment year is 1957-58 and the relevant valuation date is December 31, 1956. In the present reference we are concerned with the item of Rs. 5,53,370 which was claimed as a debt deductible in computation of the net wealth of the assessee. The assessee had claimed in the year of assessment a deduction of a total item of Rs. 12,89,784, being the aggregate of the tax assessed for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted and the demand notice having been issued, the liability remained binding on the company notwithstanding the fact that it had taken up the matter in appeal. Section 2(m)(iii)(a) of the Act provided as follows : " 2. In this Act, unless the context otherwise requires- (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--. . . (iii) the amount of the tax, penalty or interest payable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us that when the Appellate Assistant Commissioner and the Tribunal decided the respective appears before them, they overlooked the retrospective nature of the amendment made by section 20 of the Finance Act, 1959. In view of that retrospective effect, it is clear that, from the very commencement of the Wealth-tax Act, 1957, i.e., with effect from April 1, 1957, section 2(m)(iii)(a) must be read in the Act by operation of section 20 of the Finance Act, 1959. The result, therefore, is that the amount of Rs. 5,53,370, having been taken in appeal and claimed by the assessee as not being payable by it so far as the appeal proceedings were concerned, was not a debt deductible in computation of the net wealth of the assessee. It is clear that if t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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