Deductibility of tax liability on disclosed ornaments upheld where the liability arose from assets included in net wealth.

Income-tax liability arising directly from the voluntary disclosure of ornaments was deductible in computing net wealth because the disclosed ornaments were themselves included in the assessee's wealth calculation and the liability stemmed from that same disclosure. The tribunal upheld the allowance of the deduction, agreeing that the liability was a permissible charge against the disclosed asset for wealth-tax purposes, and the Department's challenge failed.

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Issues: Whether the income-tax liability arising from the voluntary disclosure of ornaments was deductible in computing the assessee's net wealth.

Analysis: The ornaments disclosed under the voluntary disclosure scheme had been included in the assessee's net wealth, and the corresponding income-tax liability arose from that very disclosure. In these circumstances, the liability was treated as allowable as directed by the Appellate Assistant Commissioner.

Conclusion: The deduction was rightly allowed and the Department's appeal failed.

Final Conclusion: The order allowing deduction of the income-tax liability was affirmed and the appeal was dismissed.

Ratio Decidendi: A liability arising directly from a disclosed asset that is itself included in the computation of net wealth is deductible when determining the assessee's taxable wealth.

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