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TMI Blog1987 (11) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and in the circumstances of the case, the Appellate Tribunal was right in holding in the face of the Appellate Assistant Commissioner of Wealth-tax admitting the appeal and deciding the appeal on merits against the assessee that the point in issue was a debatable one and, therefore, beyond the purview of section 35 of the Act ? " In respect of the assessment year 1974-75, the assessee filed a return under the Income-tax Act on the due date and the assessment was completed on December 31, 1974. Subsequent to the valuation date which fell on March 31, 1974, the assessee filed an additional (revised) return stating that, prior to the valuation date, the company in which the assessee held certain shares had declared in respect of those sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax due in respect of the dividend, did not form part of the net wealth. The inclusion of that differential in the computation of the assessee's net wealth for the purpose of assessment under the Wealth-tax Act was, therefore, an error apparent on the face of the record and rectifiable under section 35. Counsel for the Revenue, however, submits that, although income arose to the assessee and was, therefore, taxable under the Income-tax Act in the year in which it arose, the tax deductible at source under the Income-tax Act was in fact deductible only after the valuation date, but before the payment of the dividend to the assessee. Admittedly, the dividend was not paid until after the valuation date and, therefore, income-tax was also ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the company shall pay the money so deducted to the credit of the Central Government (see section 194 of the Income-tax Act and rule 30 of the Income-tax Rules). Deduction at source is only one mode of recovery and it is without prejudice to any other mode of recovery. The substantive liability of the assessee to pay the tax arose as soon as the income arose and the income arose as soon as the dividend was declared, although not actually paid. In computing the net wealth under section 2(m) of the Wealth-tax Act, income-tax deductible at source in respect of the dividend declared, but not yet deducted, is a debt owed, and is, therefore, exclude , just as a dividend is included as an asset under the Act as soon as declared, although not r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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