Net wealth includes outstanding professional fees under cash accounting, but valuation must be determined on relevant evidence.

Outstanding professional fees on the valuation date formed part of net wealth even though the assessee maintained accounts on the cash system, because the governing Wealth-tax Act principle treated such unrecovered receivables as includible. The inclusion issue was answered against the assessee and in favour of the Revenue. Their valuation, however, was not finally fixed: the correct amount had to be determined from the material on record, with discounting for liabilities, bad debts, and related factors if warranted. That valuation question was remitted to the Tribunal for fresh determination on evidence.

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Issues: (i) Whether, where the assessee follows the cash system of accounting, outstanding fees remaining unrecovered on the valuation date form part of the assessee's net wealth. (ii) If so, whether such outstandings are to be included at gross value or at their discounted value after accounting for outstanding liabilities.

Issue (i): Whether, where the assessee follows the cash system of accounting, outstanding fees remaining unrecovered on the valuation date form part of the assessee's net wealth.

Analysis: The answer was governed by the binding view already taken on the valuation of professional outstandings under the Wealth-tax Act. On that basis, the existence of unrecovered fees on the valuation date did not take them outside the scope of net wealth merely because the assessee maintained accounts on cash basis.

Conclusion: This issue was answered in the affirmative and against the assessee, in favour of the Revenue.

Issue (ii): If so, whether such outstandings are to be included at gross value or at their discounted value after accounting for outstanding liabilities.

Analysis: The correct value of the outstandings was held to depend on the material on record, and if necessary on additional material permitted to be brought before the Tribunal. The Tribunal was directed to determine whether the gross outstandings required discounting, including consideration of bad debts and related factors, in the light of the governing decisions.

Conclusion: The question was not finally quantified by the Court and was remitted to the Tribunal for fresh determination.

Final Conclusion: The inclusion of unrecovered fees in net wealth was upheld, but the valuation question was sent back for determination by the Tribunal on the evidence.

Ratio Decidendi: Under the Wealth-tax Act, receivables outstanding on the valuation date may form part of net wealth even under the cash system of accounting, while their precise value must be determined on the basis of relevant material and discounting principles, if applicable.

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