1987 (2) TMI 98

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..... re to Rs. 78,502 accepting valuation report of M/s. K.A. Pandit, actuaries dated 3-1-1983 in respect of Bombay firm. The said actuaries had also valued the assessee's share at Rs. 5,663 in respect of Ahmedabad firm but the AAC's order is silent in respect of the assessee's share from the said Ahmedabad firm. 3. Revenue's grievance is against the AAC reducing the assessee's share of outstanding fees from Rs. 10,93,200 to Rs. 78,502. Assessee in the cross-objection claims that nothing was includible in the assessee's net wealth on account of outstanding fees of the firm. 4. We may first deal with the assessee's claim objecting to the includibility of his share in the outstanding fees of the firm. Dipti Kumar Basu v. CWT [1976] 105 ITR 450 .....

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..... the abovecited case that no income-tax was payable on the outstandings on the valuation date in view of the cash system of accounting and therefore no question of deducting income-tax liability from the outstanding fees would arise. Same observations would apply to para 3(vi) of the actuaries' report in respect of personal taxation of the partners. 6. We may now deal with the remaining grounds in the actuaries' report for the scaling down the outstanding fees as on 31-3-1975 of Rs. 27,70,350 to Rs. 2,13,289. We may mention that the aforesaid report dated 18-2-1980 has been followed by the said actuaries for valuing the outstanding fees as on 31-3-1979 of the Bombay firm of Rs. 59,97,881 to Rs. 4,61,776 and of the Ahmedabad firm of Rs. 18, .....

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..... gain, revenue wanted the matter to be resorted to WTO to verify the position on the assessee furnishing required details for the preceding 5 years. 9. In para 3(iii) the actuaries have reduced establishment costs of 51 per cent from the receipts, revenue rightly contends before us that the establishment costs have already been debited in the relevant P L account which have been incurred for rendering services to the clients and therefore no establishments costs would be relevant for recovering the outstanding debts. Shri P.A. Nair partner, who appeared on behalf of the assessee, conceded this position. 10. Regarding para 3(iv) of actuaries' report about registered firm's tax and para 3(vi) regarding partner's taxation, we already disc .....

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