SUJATA V. MANOHAR, J. - (1.) THE following five questions have been referred to us under s. 27(1) of the WT Act, 1957 : "(1) Whether the adjustments prescribed in terms of s. 7(2)(a) of the WT Act can be made to the balance-sheet in the case of an assessee who is carrying on a profession ? (2) Whether, on the facts, r. 2C of the WT Rules is applicable in this case ? (3) If the answer to question No. (2) is in the affirmative, whether it is permissible to make an adjustment which has the effect of substituting the mercantile system of accounting for the cash system of accounting ? (4) If the outstanding fees of the firm are to be adjusted in the balance-sheet of the firm, whether outstanding liabilities of the firm should also be adjusted in the balance-sheet on accrual basis ? (5) Whether, on the facts and in the circumstances of the case, the Tribunal rightly excluded from the net wealth of the assessee, the assessee's share of the outstanding fees of the firm of M/s C.M. Shah and Co., Chartered Accountants, estimated at Rs. 75,000 ?" It is accepted by both the sides that the decision in the case of CWT vs. V. M. Shah (1988) 170 ITR 17 (Bom) governs this case, as also our decisions in WT Ref. No. 168 of 1976 (CWT vs. Vasantlal D. Mehta (1990) 186 ITR 284) along with WT Ref. No. 92 of 1975 (CWT vs. K. T. Divecha (1990) 186 ITR 310 delivered by us on 11th June, 1990. We would like to clarify that income tax liability on outstanding fees cannot be considered as an accrued liability in a case where the professional has kept his accounts on cash basis for the purpose of income-tax as set out in our above judgment. THE questions are, accordingly, answered as follows : Questions No s., 2 and 3 in the affirmative and in favour of the Revenue. Question No. 4 in the affirmative and in favour of the assessee. Question No. 5 in the negative and in favour of the Revenue. No order as to costs.;