Mitter, J. - (1.) The question referred to this Court under Section 27(1) of the Wealth Tax Act is as follows: "Whether on the facts and in the circumstances of the case, the amounts appearing in the Company's balance sheets as on 31-3-1957 and 31-3-1958 after 31-3-1958 as liabilities for taxes in respect of which the assessments were still pending and dividends which were proposed but not declared were deductible in determining the net wealth of the company for the assessment years 1957-58 and 1958-59?"
(2.) The question really comprises two distinct and separate matters. The first part concerns an amount of Rs. 13,26,251 which the Company estimated to be due on account of taxes in respect of a period upto March 31, 1957 for which the assessment had not been completed, and another sum of Rs. 11,19,126 being an estimated amount of income tax for the year ending March 31, 1958. The second part of the question concerns an amount of Rs. 12,00,000 representing the dividends proposed by the Directors for the said two years, which had however not been actually declared on or before the relevant valuation dates.
(3.) On both the heads it was contended before the Tribunal that the liability for taxation as also the provision for dividends were properly deductible from the total value of the assets for the purpose of computing the Company's not wealth. Alternatively it was argued that since the net value of the assets of the business was being determined under Sub-section (2) of Section 7 of the Wealth Tax Act deduction of liabilities which were not converted into debts was also permissible while determining the net value of the assets as a whole. The Tribunal rejected both the contentions.;