Decided on March 20,1982



T.V.K.N. Chandran, Accountant Member - (1.) THESE appeals by the revenue are consolidated and disposed of by a common order for the sake of convenience as they involve a common ground. THESE appeals relate to the assessment years 1970-71 to 1975-76 and are directed against the consolidated order of the AAC dated 17-9-1980 wherein he held that the taxes deducted at source from the salaries of the employees but remaining unpaid to the credit of the Central Government for more than 12 months, were not covered by Section 2(m)(iii) of the Wealth-tax Act, 1957, and accordingly deductible in the computation of net wealth. The common ground taken by the revenue is that the learned AAC erred in doing so.
(2.) At the time of hearing none appeared on behalf of the assessee although the notice of hearing was duly served on 17-2-1982 and acknowledgment is on record. Therefore, the learned departmental representative was duly heard and the case is decided ex parts on merits of the Base. The assesses is an individual. While computing the net wealth of the assessee the WTO determined the share of interest of the assessee in the partnership concern, Chatterjee & Polk. While determining the interest of the assessee in the aforesaid concern he made certain adjustments, with the result certain amounts of income-tax liability appearing in the balance sheets of the firm were excluded by the WTO, as detailed under column 4 in the table shown in paragraph 3 of the order of the AAC. The case of the WTO was that the amounts were outstanding for a period of more than 12 months on the respective valuation dates and, hence, hit by Section 2(m)(iii).
(3.) ON appeal, inter alia, the AAC held that the liability arising out of Section 192, that is, deduction of tax from the salaries payable to the employees, would not amount to a liability arising in consequence of any order passed under the Income-tax Act or other Acts specified therein. Therefore, he held that the conditions envisaged under items (a) and (b) to Sub-clause (iii) of Section 2(m) would not be satisfied in respect of any liability of the assessee for payment of tax of some other persons within the meaning of Section 199 of the Income-tax Act, 1961. Consequently, he rejected the contention of the WTO that the timely deposit of the tax deducted at source was a duty cast on the assessee in pursuance of the relevant provisions of the Act and, therefore, the liability was hit by Section 2(m). However, the AAC had given a direction to ascertain the correct quantum of such liability as the WTO has expressed desire to do so. Hence, these appeals by the revenue before the Tribunal.;

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