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TMI Blog1970 (4) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, the provision for proposed dividend of Rs. 1,53,400 was deductible in computing the net wealth of the assessee ? 3. Whether, on the facts and in the circumstances of the case, the sum of Rs. 5,49,041 being the balance of the demand payable as a result of the findings and orders of the Income-tax Investigation Commission was deductible in determining the net wealth of the company ? " The first two questions may be disposed of at once in view of the decision of the Supreme Court in the case of Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealth-tax. That decision was pronounced on November 24, 1965, and it was not evidently, before the Tribunal when it decided the appeal on August 5, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresents the amount provided for by the assessee-company in its accounts on the valuation date, for payment of dividends to the shareholders, as recommended by its directors. It is common ground that the general body meeting for the relevant year was not held on or before the valuation date which is September 30, 1956. The amount of proposed dividend is not, therefore, deductible in computing the net wealth of the assessee. The result is that question No. 1 must be answered in the affirmative and in favour of the assessee, while question No. 2 must be answered in the negative and against the assessee. We are now left with question No. 3. The assessee is a limited company engaged in the manufacture of cotton textiles, etc. As a result of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 incurred in relation to, any asset in respect of which wealth-tax is not payable under this Act ; and (iii) the amount of the tax, penalty or interest payable in consequence of any order passed under or in pursuance of this Act or any law relating to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection is not material. Referring to the provisions of the above sections the Tribunal remarked that they clearly indicate that the principle to be adopted in computing the net wealth is that when any assets are included, corresponding debts are to be allowed, and when such assets are liable to be excluded from the net wealth, corresponding debts are also to be excluded. It was not disputed on behalf of the assessee that the demand for tax made by the Investigation Commission was in respect of secreted profits which had not been disclosed in the books of account maintained by the assessee and it was also conceded that the assets shown in the balance-sheet did not include any assets acquired out of such secreted profits. The Tribunal, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to any of the assets shall not be allowed in the assessment. Section 6 refers to the assessment of non-citizens and it lays down that in computing the net wealth of such assessees, their assets as well as debts located outside India shall not be taken into account. This section refers to a special class of assessees and special category of assets and debts. It would be illogical to lay down a general proposition applicable to all assessees from the terms of this section. It would be equally illogical to seek to deduce the scheme of the Wealth-tax Act from section 4(3) which is operative only in specific cases. The amount of income-tax and super-tax, etc., payable on business profits which were originally suppressed, but subsequently d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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