Valuation date governs wealth-tax treatment of prior undisclosed income; long lapse defeats any presumption of continuing assets.

In wealth-tax matters, the valuation date is decisive, and earlier assessment of undisclosed income does not by itself establish that the same assets continued to exist on later dates. The Court applied the principle that a prior presumption of asset existence can be displaced by the passage of time, and that no presumption remains that secret profits or intangible additions were still held by the assessee after a sufficiently long lapse. On that basis, the additions could not be treated as wealth on the later valuation dates, and the issue was resolved in favour of the assessee.

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Issues: Whether additions treated as undisclosed income in earlier income-tax assessments could, after a long lapse of time, be presumed to remain available as assets of the assessee for wealth-tax purposes.

Analysis: The question turned on whether the earlier assessed intangible additions could still be regarded as wealth on the relevant valuation dates. The Court relied on the principle that, in wealth-tax matters, the decisive date is the valuation date and not merely the fact that undisclosed income had once been assessed. It held that after a sufficiently long period, no presumption can be raised that secret profits or intangible additions continued to be held by the assessee. The earlier presumption of existence of assets was treated as rebutted by the counter-presumption of extinction arising from the passage of time.

Conclusion: The issue was answered in favour of the assessee, and the additions could not be taxed as wealth for the later assessment years.

Ratio Decidendi: In wealth-tax proceedings, where a sufficiently long period has elapsed, a prior presumption that undisclosed income or intangible additions remained in the assessee's hands on the valuation date cannot be sustained.

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