1993 (11) TMI 29

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....L J.--The Income-tax Appellate Tribunal has referred the following questions of law arising out of its order dated February 10, 1982, in respect of the assessment years 1974-75 and 1975-76, under section 27(1) of the Wealth-tax Act, 1957. "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in upholding that the order of the Commissioner of Wealth-Tax (Appe....

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....r in Messrs. Thakur Dass Khinvraj having 50 per cent. shares. The said firm had to realise a sum of Rs. 2,50,000 from Messrs. Radha Krishna Trading Company (P.) Ltd., and Rs. 59,000 from Messrs. S. Vappa, Raichur. Having no hope to realise the said debts, the value of the share of the assessee in the firm was worked out by reducing the said debts which were considered as bad debts. The claim of th....

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....eing not an ascertained liability and only a contingent liability was not reduced. In H. H. Shri Natwarsinhji v. CWT [1993] 201 ITR 133, the Gujarat High Court has held that a debt which has become irrecoverable cannot be included in the net wealth and it is not necessary that it should be written off in the books of account. The subsequent events were also taken into consideration. We need not....

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....e was less than the book value, then the Wealth-tax Officer has to proceed on the basis of such valuation of the debt. There may be a case where the entire debt does not have any value because it could not be recovered or a dispute exists of the nature reducing its value to nil or for such like circumstances. The debt may have a reducing value as well besides the nil value and in accordance with t....