1965 (10) TMI 20

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....f the Indian Income-tax Act for the two assessment years under consideration constitute a debt owed by the assessee within the meaning of section 2(m) of the Wealth-tax Act as on the valuation date ? " The facts and circumstances of the case are as follows. Demands in respect of the payment of tax under section 18A of the Indian Income-tax Act, 1922, were made against the respondent-company, M/s. Standard Vacuum Oil Co. Ltd., for the two years ending December 31, 1956, and December 31, 1957 by notices of demand dated May 28, 1956, and May 31, 1957, respectively. The final instalment of the amount of Rs, 47,69,653 for each of the two years was outstanding on the respective valuation dates. The assessee claimed that the demand for such tax ....

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....sum. In order to appreciate the contention of the learned counsel, it is necessary to consider the relevant statutory provisions, first of the Wealth-tax Act and then of the Income-tax Act. Section 2(m) of the Wealth-tax Act defines " net wealth " as follows : " '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) debts which under section 6 are not to be taken into account ; and (ii) debts whi....

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....ssessee to pay quarterly to the credit of the Central Government on the 15th day of June, 15th day of September, 15th day of December and 15th day of March in that year, respectively, an amount equal to one-quarter of the income-tax and super-tax payable on so much of such income as is included in his total income of the latest previous year in respect of which he has been assessed. " It is not necessary to refer to the rate at which he has to calculate the tax. Sub-section (2) of section 18A enables an assessee to formulate his own estimate of the tax payable by him if he considers that the income is less than that on which he has been required to pay tax, but he has to send this revised estimate of the tax payable by him before any one of....

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....lments. Under sub-section (11) any sum paid or recovered from the assessee in pursuance of the provisions of section 18A is given credit towards the tax due in respect of the appropriate year. We cannot find any substantial difference between advance tax paid under the provisions of section 18A and tax due and paid under a demand notice passed after an assessment. The only difference is that if the facts so warrant, the assessee is enabled to pay less than the amount demanded by the Income-tax Officer. But till a new estimate is made by the assessee, the amount is ascertained and there is a statutory liability on the assessee to pay the amount mentioned in the order under section 18A. We agree with the observations of the Gujarat High Court....