9911796707
TMI Blog1970 (12) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation date is 31st March, 1960. We only propose to deal with the facts in Wealth-tax Reference No. 2 of 1969. It is not disputed that our decision in this reference will govern all the other references. The assessee, Vijay Kumar Behal of Ludhiana, was a partner in Messrs. Pearl Hosiery Mills and Messrs. Pearl Woollen Mills, Ludhiana. The Income-tax Officer found during the assessment proceedings for the years 1959-60 and 1960-61 that the said firms had undervalued their stocks and thereby concealed their income. It was also found that the said concealed income had been introduced in the books of account in the form of hundi loans which in fact were fictitious. Ultimately, the firms surrendered the concealed income for assessment. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee's claim. The relevant part of the decision of the Tribunal is quoted below : " In the case of Kesoram Industries and Cotton Mills Ltd., the appellant-company had, in its balance-sheet for the year ending March 31, 1957, shown a certain amount as provision for payment of income-tax and super-tax in respect of that year of account. The question was whether that amount was a 'debt owed' within the meaning of section 2(m) of the Wealth-tax Act, 1957, as on March 31, 1957, which was his valuation date, and as such deductible in computing the net wealth of the appellant-company. Subba Rao J. (as he then was), delivering the majority judgment of the court, held that the word 'owe' meant to be under an obligation to pay, that it did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the relevant valuation date. The liability to pay tax is based on the earning of income and not on the intention to disclose it or conceal it. Respectfully following the above decision of the Supreme Court, we hold that the assessee is entitled to deduction of tax payable on concealed income assessed for the year under consideration. " The Commissioner of Wealth-tax being dissatisfied with the order of the Tribunal applied under section 27(1) of the Wealth-tax Act, 1957, praying that the following question of law be referred for the opinion of this court : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the determination of the assessee's net wealth, the assessee was entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers the present case. It may be mentioned that their Lordships of the Supreme Court in Kesoram Industries case, pointed out, while dealing with the provisions of the Income-tax Act, that " the tax liability at the latest will arise on the last day of the accounting year ". On parity of reasoning, therefore, the decision in H. H. Setu Parvati Bayi v. Commissioner of Wealth-tax will fully cover the present case. What has been stated above can be supported on the basis of section 2(m) of the Wealth-tax Act. Section 2(m) is quoted below for facility of reference and, on its true interpretation alone, the decision of the Tribunal must stay : " 2. (m) In this Act, unless the context otherwise requires- 'net wealth' means the amount by which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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