TaxTMI 
TaxTMI 
1979 (3) TMI 1
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....rties. Certain disputes and difference arose after his death between his two sons, namely, Maharaja Vikramsinghji and his younger brother Shivaraj Singhji, in respect of the assets left by the late Maharaja Saheb. The younger brother was contemplating legal proceedings against his elder brother. Their mother intervened. The idea of litigation, thereupon, was dropped because the assessee gave a letter dated May 14, 1953, to Shivaraj Singhji stating therein : " Our father had expressed in the presence of many people that he will give you rupees fifty lakhs. To keep up his words and promise and also that I should get peace of mind I am writing to you that if your brother Vikramsinghji Maharaja of Gondal does not give you the full amount, then....
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....53, paid only Rs. 20,00,000. The assessee succeeded in wiping off her liability to the extent of Rs. 11,00,000 on September 12, 1959, by transfer of war stock. The balance of the liability, i.e., Rs. 19,00,000, remained due and continued to be due on all the three valuation dates aforesaid. It could be wiped off by a further settlement only in February, 1962. In respect of the three assessment years in question, however, a question arose as to whether while assessing the net wealth of the assessee within the meaning of cl. (m) of s. 2 of the W.T. Act the said sum of Rs. 19,00,000 was to be deducted. The W.T.Tribunal held in favour of the assessee. At the instance of the revenue for all the three years a common question of law was referred t....
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.... short of Rs. 50,00,000 if her elder son did not pay any portion thereof. It is well established that such a consideration is a good consideration which brings about an enforceable agreement between the parties. Section 25 of the Contract Act does not hit this. It may be further pointed out that even if it be held that the letter dated May 14, 1953, had not the effect of bringing about the family arrangement and any binding agreement between the parties, their subsequent conduct up to September 12, 1959, brought about a concluded family arrangement. Vikramsinghji paid Rs. 20,00,000. Out of the balance of Rs. 30,00,000 the assessee discharged her liabilities to the extent of Rs. 11,00,000 and reiterated her obligation to pay the balance of ....
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....t at issue before us. In the case of Kesoram Industries [1966] 59 ITR 767 (SC), it was held that " debt owed " within the meaning of s. 2(m) of the W.T. Act, 1957, could be defined as the liability to pay in praesenti or in future an ascertainable sum of money. It was held that a liability to pay income-tax was a present liability though the tax became payable after it was quantified in accordance with ascertainable data. Subba Rao J., as he then was, delivering the majority opinion, said at page 780 The said decisions also accept the legal position that a liability depending upon a contingency is not a debt in praesenti or in futuro till the contingency happened. But if there is a debt the fact that the amount is to be ascertained does no....