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TMI Blog1979 (2) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... one consolidated balance-sheet for the years in question, namely, 1960-61 to 1967-68. It was claimed by the assessee that she had liability for agricultural income-tax and also had loans by hypothecation of tea crops, etc; that she was entitled to the deduction of her income-tax liabilities and loans on hypothecation from the assessment of net wealth. The WTO, however, rejected her claim holding that agricultural income was debt incurred in relation to the agricultural assets which were exempt from the wealth-tax and that the provision of s. 2(m)(ii) was applicable and no deduction could be made for this liability. He also observed that the agricultural income had not been paid within one year from the date of assessment and her demand also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it is a debt owed by the assessee. It is a charge on agricultural income but it is not specially secured or charged on agricultural assets only." This controversy is the subject-matter of the common question in Wealth-tax References Nos. 9 and 11 of 1975. The department then made an application for reference of the two questions to the High Court. The Tribunal referred only the following question to this court for opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that agricultural income-tax is allowable as a debt and the provisions of section 2(m)(ii) of the Wealth-tax Act, 1957, are not applicable to the same?" Hereinafter we call this question as question No. 1. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequence of any order passed under or in pursuance of this Act or any law relating to taxation of income or profits, or the Estate Duty Act, 1953, the Expenditure-tax Act, 1957, or the Gift-tax Act, 1958,- (a) which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him ; or (b) which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the valuation date." "Assets" has been defined in section 2(e) as follows : (material portions only): "(e) 'Assets' includes property of every description, movable or immovable, but does not include- (i) agricultural land and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rop of the said estate and the produce thereof manufactured or in process of manufacture (hereinafter referred to as "the said tea crop") to be grown made and/or manufactured .........." were hypothecated. The finding of the WTO is also that "the assets pledged include land and plantation" and that "the hypothecation loan stands secured against all the assets of the tea estate, in proportion with agricultural and non-agricultural assets, and this loan cannot be referable against the non-agricultural assets only". The debts secured relate to assets which have not been included in the definition of assets as defined in s. 2(e) and, as such, s. 2(m)(ii) will apply to the facts of the case. The learned Tribunal has held that the non-agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X
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