1982 (1) TMI 22

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....ting the Wealth-tax Officer to allow deduction of tax liabilities in accordance with the principle laid down by the courts ? " The relevant assessment years are 1970-71 and 1971-72, The assessee declared a net wealth of Rs. 41,21,486 for the first assessment year and Rs. 41,04,502 for the second assessment year bat did not claim any deduction on account of liabilities in respect of income-tax, wealth-tax and other taxes on the relevant valuation dates.. The WTO did not allow any such liability to be deducted in the matter of computation of net wealth. On appeal, the AAC directed the WTO to examine the claim of the assessee in respect of the aforesaid deduction keeping in view the observations of the Supreme Court in the case of CWT v.....

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....yi v. CWT), that the liability for wealth-tax becomes crystallised on the valuation date, and not on the first day of the assessment year though the tax may be quantified by assessment and may become payable after the commencement of the assessment year. " The first appellate authority referred to the ratio in the case of CWT v. Kantilal Manilal [1973] 88 ITR 125 (Guj), at p. 129, and held that in the facts of the case, a further investigation was necessary by the WTO. Accordingly, he directed : "The Wealth-tax Officer shall take care not to deduct two types of taxes claimed to be debts owed by the assessee: one" outstanding taxes for more than twelve months as on the valuation date and outstanding taxes due as on the valuation date b....