1999 (9) TMI 7

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....on of law, for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in allowing the claim of the tax liabilities of earlier years under section 2(m) of the Wealth-tax Act, 1957, when though the assessee was not disputing the liability, the same was not paid within the statutory period?" The assessee is an individual. The Assistant Commissioner of Wealth-tax "A" Circle, Udaipur, estimated the value of the jewellery for the various years, as follows: **** Rs. 1981-82 25,37,993 1982-83 26,85,000 1983-84 17,10,000 1987-88 34,52,120 The above estimate was made in view of the rise in price of gold as compared to preceding years. T....

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....ave been allowed as deduction while computing the net wealth. On the other hand, Mr. Sanjeev Johari, learned counsel for the assessee, has supported the order of the Tribunal and the Commissioner of Wealth-tax (Appeals). We have considered the rival contentions. Section 2(m) of the Act defines "net wealth", which reads as follows: "(m) 'net wealth' means the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than (i) d....

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....ich is not includible in the net wealth under sub-section (1A) of section 5;" The provision nowhere says that only those debts will be allowable which are paid by the assessee. The debt as standing on the valuation date has to be adjusted against the gross wealth and accordingly the net wealth is required to be determined. That an income-tax liability is a debt within the meaning of section 2(m) of the Act is settled by a series of decisions of the apex court beginning from Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767 and R. K. Deo v. CWT [1992] 196 ITR 128. In the instant case, on account of death of the assessee, the assessment has been made in the hands of the legal heir. The liability of the legal heir has to be ....