V.G. Oak, C.J. - (1.) THIS is a reference under the Wealth-tax Act, 1957 (hereafter referred to as "the Act"). The assessee is a Hindu undivided family. The assessment year is 1959-60. The corresponding valuation date was November 8, 1958.
(2.) SRI Banarsi Das was the karta of the assessee family. On November 8, 1958 (the valuation date), between 6 p.m. and 8 p.m. he gave directions to the munim of Messrs, Bhagwati Prasad and Company that capital amounting to Rs. 1,07,892 invested by the assessee in the firm should be divided amongst the members of the Hindu undivided family. In accordance with that direction, the munim made entries after 8 p.m. When the Wealth-tax Officer took up assessment of wealth-tax against the Hindu undivided family, the question arose whether the sum of Rs. 1,07,892 ought to be included in the net wealth of the assessee. The assessee contended that, in view of the distribution of the amount amongst members of the assessee family on the valuation date, that amount ought to be excluded from the net wealth of the assessee. This contention was not accepted by the Wealth-tax Officer. He held that the sum of Rs. 1,07,892 formed part of the net wealth of the assessee on the valuation date. The assessee was assessed to wealth-tax accordingly. This view was upheld in appeal by the Appellate Assistant Commissioner and by the Appellate Tribunal. At the instance of the assessee, the Tribunal has referred the following question of law to this court: "Whether, on the facts and in the circumstances of the case, the sum of Rs. 1,07,892 was rightly included in the total wealth of the assessee for the assessment year 1959-60 ?" Section 3 of the Act is the charging provision. Section 3 of the Act states: "... there shall be charged for every financial year ... a tax (hereinafter referred to as 'wealth-tax') in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule."
(3.) THE question for consideration in the instant case is whether the sum of Rs. 1,07,892 formed part of the net wealth of the assessee on November 8, 1958. The Appellate Assistant Commissioner observed : "The entries regarding the division of the capital are said to have been passed by the munim on the same day after 8 p.m. I am not sure if the entries regarding the division of capital were in fact made on November 8, 1958, but I will assume for the present that the appellant's statement in this regard is correct." ;