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Issues: (i) Whether wealth-tax liability for the assessment year 1959-60 was deductible in computing the assessee's net wealth for that year. (ii) Whether, where assessments for earlier years were not finalised on the valuation date, the deductible wealth-tax liability had to be computed on the basis of the liability finally ascertained on completion of those assessments rather than on the estimated liability returned by the assessee.
Issue (i): Whether wealth-tax liability for the assessment year 1959-60 was deductible in computing the assessee's net wealth for that year.
Analysis: The liability was treated as an allowable deduction for the relevant assessment year, following the governing principle that the wealth-tax liability attributable to the year forms part of the deductions in computing net wealth.
Conclusion: The issue was answered in favour of the assessee.
Issue (ii): Whether, where assessments for earlier years were not finalised on the valuation date, the deductible wealth-tax liability had to be computed on the basis of the liability finally ascertained on completion of those assessments rather than on the estimated liability returned by the assessee.
Analysis: The deductible amount was held to be the wealth-tax liability finally and actually ascertained on completion of the assessments, and not a mere estimate based on the return filed by the assessee, because the deduction must reflect the liability as ultimately determined.
Conclusion: The issue was answered in favour of the assessee.
Final Conclusion: Both questions were answered against the Revenue, and the dismissal of the appeals left undisturbed the view that the relevant wealth-tax liabilities were deductible in computing net wealth.
Ratio Decidendi: For wealth-tax computation, deductible liability is the liability as finally ascertained on the relevant valuation date and assessment process, not a speculative or merely estimated liability.
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