TaxTMI 
TaxTMI 
1982 (2) TMI 136
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....r date. 3. That the learned AAC ought to have applied the decision of their Lordships of the Gujarat High Court in the cases of CWT v. Kantilal Manilal [1973] 88 ITR 125 and CWT v. Jayantilal Amratlal [1976] 102 ITR 105. He ought to have considered that the process of assessment is a process of quantification of tax liabilities and tax so finally determined, though much after the valuation date, is legally allowable as debt owed within the meaning of section 2(m) of the Act. 2. All the four appeals are against a consolidated order. The parties, facts and circumstances and the issue involved are common. For the sake of convenience, therefore, we propose to dispose of all the four appeals by this single order. 3. The appellant-assessee is a resident individual/citizen of India and the assessment years involved are 1971-72 to 1974-75. The relevant valuation dates are 31-12-1970, 31-12-1971, 31-12-1972 and 31-12-1973, respectively. A perusal of the assessment orders dated 24-2-1978 shows that the returns of wealth were filed on 23-6-1978. The learned WTO, Shri G.W. Sane, disallowed the assessee's claim in respect of tax liabilities observing that the amounts claimed are not admissib....
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....nbsp; 30,043 1972-73 61,322 1973-74 86,830 1974-75 &nbs....
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....rder of the learned AAC on the identical grounds mentioned above. On behalf of the appellant, Shri P.D. Nagar, very systematically and consistently raised all the contentions. He must have been raising since the learned WTO's stage (sic) and further mentioned that quantification of tax liability is altogether different from the existence of such liabilities and that outstanding for 12 months should not be counted on the basis of assessment order, demand notice and that, in fact, such claims should be considered on the basis of existence of the liability after expiry of the relevant accounting period. 6. He continued that though the liability might have not been quantified as well the same was very much in existence and may be allowed that only which was finally quantified (sic). Shri Nagar further mentioned that "outstanding" appearing in the relevant section of the Wealth-tax Act should be construed and interpreted to mean that the outstanding was after the expiry of the accounting period; absence of assessment order and demand notice notwithstanding. 7. For assistance, Shri Nagar relied upon the ratio in the following decisions in Kesoram Industries & Cotton Mills Ltd., Kantila....
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....diture-tax Act, 1957 (29 of 1957), or the Gift-tax Act, 1958 (18 of 1958)--- (a) which is outstanding on the valuation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him ; or (b) which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the valuation date." A careful examination, analysis and diagnosis of item (a) shows as if the "outstanding" liability on the valuation date, should have been finally accepted by the assessee, i.e., on appeal, revision or rectification be pending disposal (sic). In this connection it is pertinent to mention that in the assessee's case, the liabilities were challenged since the assessment orders referred to above were accepted by the assessee. But the date of orders being as they are, outstanding does not appear to be on the relevant valuation dates and, therefore, the assessee's case is not supported by this item (a). In term of item (b), the liability which, although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than 12 months on the valuation date. ....
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....tion date, the amount of wealth-tax did not become payable before the relevant valuation date and, therefore, cannot be said to be outstanding on the relevant valuation date for the purpose of section 2(m)(iii)(a) of the Act." Thus, keeping in view the various dates, it is possible to infer that in fact nothing happened on 31-12-1970 to 31-12-1973, i.e., relevant valuation dates. The dates of filing the return and the assessment orders are all the dates subsequent to the valuation dates. No doubt, the wealth-tax assessments were framed on 24-2-1978 but reference being to the valuation date, the different assessment orders are, therefore, irrelevant and, therefore, of no consequence. 11. The assessee's reliance on the ratio in the case of Kesoram Industries & Cotton Mills Ltd. appears to be of no help to the assessee. In the said case, no doubt, their Lordships of the Supreme Court considered that on 31-3-1977 the director's proposed dividends but the same was sanctioned on 27-11-1977 and, therefore, the provision became 'debt" only after general meeting of the shareholders of the company. In the said ratio, their Lordships conceded that on the valuation date in that case, nothing ....