TaxTMI 
TaxTMI 
1982 (4) TMI 63
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.... Rs. 308,420 and Rs. 4,02,940, respectively. Subsequently, the assessment for 1965-66 was reopened under s. 17 of the W.T. Act, 1957, hereafter " the Act " and the reassessment was completed on December 13, 1971, on the total wealth of Rs. 3,66,550. In the meantime search was made of the business premises of M/s. Banaras Chemical Factory and a settlement was arrived at between the assessee and the department which was in respect of the assessment years 1956-57 to 1966-67. The income-tax assessments were completed on the basis of that settlement and the demands were created on October 18, 1966. As a result of that settlement the wealth-tax assessments for 1965-66 and 1966-67 were reopened under s. 17 of the Act. In these proceedings the asse....
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....the result, the Tribunal accepted the assessee's claim and allowed the deduction of the income-tax liability for the remaining years as well, i. e., for the assessment years 1956-57 to 1963-64. Now, at the instance of the department, the following question has been referred by the Tribunal for the opinion of this court: " Whether, on the facts and circumstances of the case, the Tribunal was legally justified in holding that the provisions of sec. 2(m)(iii) of the W.T.Act were not applicable to this case and that the liability to incometax for earlier years was allowable as a deduction from the total wealth of the assessee computed for the assessment years 1965-66 and 1966-67 ? " Section 3 of the Act creates a charge in respect of the ....
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....epresents the amount by which the aggregate value of all the assets belonging to the assessee on the relevant valuation date is in excess of the aggregate value of all the debts owed by the assessee on such valuation date. The aggregate value of the assets is to be computed in accordance with the provisions of the Act. The value of a debt means the money with the assessee which he owes to his creditors. The word " debt " is not defined in the Act. The scope and ambit of the expression " all debts owed " came up for consideration before the Supreme Court in Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767. It was laid down that a debt is a sum of money which is now payable or will become payable in future by reason of a pres....
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....ence may also be made to a decision of this court in CWT v. PadamPat Singhania [1972] 84 ITR 799. There are, however, certain exceptions to this rule and they are contained in cls. (i) to (iii) of this section. The first clause is linked with s. 6 under which a debt payable by an individual who is not a citizen of India or of an individual or an HUF not resident in India or resident but not ordinarily resident in India, should be excluded in the computation of net wealth of such non-citizen or person not resident or not ordinarily resident in India. The second clause refers to such debts which are secured on, or which have been incurred in relation to, any property in respect of which wealth-tax is not chargeable. Under the, third clause....