Advance rent as debt for wealth-tax purposes applies only to the unadjusted balance held returnable on tenancy termination.

Advance rent held on behalf of tenants, and returnable if the tenancy was determined, was treated as a liability only to the extent it remained unadjusted. The Tribunal's factual findings showed that the amount was to be set off against future rent over several years, so the outstanding balance alone retained the character of a debt for wealth-tax purposes under section 2(m) of the Wealth-tax Act, 1957. On those concluded facts, no referable question of law survived for consideration by the High Court, and reference was declined.

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Issues: Whether the assessee's one-third share in the advance rent received from a foreign embassy constituted a debt within the meaning of section 2(m) of the Wealth-tax Act, 1957, so as to warrant reference of the question to the High Court.

Analysis: The Tribunal had recorded factual findings that the assessee held the advance rent on behalf of the tenants, that the amount was to be adjusted against rent payable over a period of years, and that any outstanding amount would be returnable if the tenancy was determined. Those findings showed that only the unadjusted balance retained the character of a liability. Since the reference question turned on those concluded facts, the answer to the proposed question was treated as self-evident and no referable question of law survived.

Conclusion: The advance rent, to the extent remaining unadjusted, was capable of being treated as a debt due to the tenants; no reference was called for.

Final Conclusion: The petition for reference was rejected, leaving intact the view that only the outstanding unadjusted amount could be considered as a deductible liability under the Wealth-tax Act, 1957.

Ratio Decidendi: Where the Tribunal's findings establish that advance rent is held on behalf of tenants and remains returnable on determination of tenancy, the unadjusted balance constitutes a debt or liability for wealth-tax purposes, and no referable question of law arises from those findings.

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