BANERJEE, J. - (1.) THIS is a reference, under s. 27(1) of the WT. Act, made at the instance of both the assessee and the CWT. The assessment year involved is the year 1958-59, the relevant valuation date being 30th Nov., 1957. The assessee is a sterling company incorporated in Great Britain and is a manufacturer of tea grown in its own gardens in India. In the computation of its net wealth, as on the relevant valuation date, the assessee, inter alia, claimed deduction in respect of the value of certain residential quarters, store houses and outhouses, plant and machinery, lorries and motor cars and also in respect of certain liabilities said to be taxation liabilities. The WTO rejected the claims made by the assessee. Thereupon, the assessee appealed before the AAC, who rejected the claim of the assessee in respect of residential house with the observation that they were not used for the assessee's own dwelling house but were merely used for the residential purposes of the employees of the assessee. He, therefore, expressed the opinion that the assessee was not entitled to any exemption in respect of those residential quarters under s. 2 (e)(ii) of the WT Act. Out of the claim for deduction amounting to Rs. 1,28,582 and Rs. 97,008 in respect of store houses and outhouses, the AAC allowed a deduction of Rs. 28,710 only and rejected the rest of the claim. With regard, however, to the claim of the assessee for deduction of value of the plant and machinery and lorries and motor cars the AAC held that the following machinery only, valued at Rs. 4,74,255 were entitled to exemption, under s. 5(1)(ix) of the WT Act, namely: With regard to the claim for deduction for liabilities, said to be taxation liabilities, the AAC allowed a sum of Rs. 44,39,718 only, and disallowed the balance as not representing any debt owed by the assessee on the material valuation date. Against the order of the AAC the assessee and the Revenue both appealed before the Tribunal. The Tribunal affirmed the order of the AAC in so far as he refused to allow deduction of the value of the residential house in the computation of the net wealth of the assessee with the following observation : "The deduction is claimed on the ground that these are dwelling houses within the meaning of the proviso to s. 2(e)(ii). In the case of Calcutta Stock Exchange Association Ltd.(1), a Division Bench of the Calcutta High Court interpreted the word 'residence'used in proviso to s. 9(2) of the Indian IT Act to mean the place where a human being eats, drinks and sleeps. The word 'dwelling house' used in s. 2(e)(ii) has a narrower significance than the word 'residence'. It is obvious, therefore, that an impersonal entity such as a company cannot require a dwelling house for its own occupation. There is nothing in the proviso to s. 2(e)(ii) to suggest that the building required by a cultivator as a dwelling house for the purpose of residence of its employees or agents was also to be entitled to the exemption." The Tribunal confirmed the order of the AAC and rejected the claim of the assessee for deduction of Rs. 3,04,210 representing the value of electrical machinery, grinding mills, telephones, welding machinery and dusting machinery in the view that none of them came within the category of tools and implements used by the assessee for raising agricultural produce. The Tribunal also affirmed the order of the AAC and rejected the claim of the assessee in respect of lorries and motor cars valued at Rs. 41,027 with the following observation : "We think the AAC was right in holding that the lorries and motor cars cannot be regarded as 'tools and implements used by the assessee for raising agricultural produce'within the meaning of s. 5(1)(ix). We see no reason to interfere with the order of the AAC. An alternative contention made on behalf of the appellant in this connection was that at least 60 per cent. of the above sum as being attributable to the raising of the agricultural produce, should be allowed as a deduction. We cannot accept this contention also. Unless an asset comes within the purview of any of the exemptions provided for in the WT Act no part of the value thereof can be excluded." The Tribunal reversed the order of the AAC in respect of stationary wire ropes and crab winches valued at Rs. 28,817 with the following observation : "We are afraid, the items in question do not come within the category of 'tools and implements used by the assessee for the raising of agricultural produce' within the meaning of s. 5(1)(ix) of the WT Act. A machinery or a plant is not entitled to exemption, even if it is wholly used for agricultural . Rs. (i) Stationary wire ropes and crab winches 28,817 (ii) Tubewells 1,73,056 (iii) Water supply plant 2,72,382 . 4,74,255 purpose, unless it comes within one of the exceptions provided for in the WT Act. The AAC was, therefore, wrong in holding that these items are exempt under s. 5(1)(ix)." The Tribunal, however, affirmed the order of the AAC in so far as the tube-wells and water supply plants were concerned with the following observations : "In our opinion, however, tube-wells, and water supply plants (non-factory) which are permanently fixed to the earth of the agricultural lands opened by the appellant should be regarded as a part of such agricultural lands which do not constitute the taxable assets of the appellant in view of the provisions of s. 2(1)(i) of the WT Act." The revenue had challenged the order of the AAC allowing income- tax liability for the years 1954- 55, 1955-56 and 1957-58 as debts owed by the assessee on the valuation dates. At the hearing, however, the Revenue restricted the contention in respect of Rs. 38,16,755 only, which amount was kept pending for settlement of the double income-tax relief, namely, for: unal found that in the notices of demand issued by the ITO for the asst. yrs. 1954-55 and 1957-58, there was no adjustment in regard to the amount of double income-tax relief, in respect of which a settlement proceeding was pending and that the demands were made for the entire amount of taxes as assessed for those years. The Tribunal, therefore, held that the amounts so demanded constituted debts owed by the assessee within the meaning of s. 2(m)(iii) of the WT. Act and the assessee was entitled to a deduction in regard to the entire amount of tax as per demand notices for the asst. yrs. 1954-55 and 1957-58. For the asst. yr. 1955-56, however, the Tribunal found that there was an adjustment in the demand notice itself in respect of the sum of Rs. 22,00,008 being the amount of double income-tax relief, which was kept in abeyance and, therefore, there was no debt owed by the assessee to the extent of this amount. The Tribunal, therefore, allowed the departmental appeal only to the extent indicated above. The Tribunal rejected the contention put forward on behalf of the Department that by claiming the double income- tax relief, as against the assessable tax, the assessee had disputed the quantum of the taxes, and, therefore, the claim for allowance for taxation fell within the mischief of s. 2(m)(iii) of the WT Act. Thereupon, both the assessee and the Revenue asked for reference of certain questions of law to this Court. The Tribunal referred the following questions of law, at the instance of the assessee : "(1) Whether, on the facts and in the circumstances of the case, the value of stationary wire ropes and crab winches amounting to Rs. 28,817 and the value of electrical machinery, grinding mills, welding machinery, etc., aggregating to Rs. 3,04,210 and motor cars and lorries valued at Rs. 41,267 or even 60 per cent. thereof, is allowable as a deduction in the computation of the net wealth of the assessee under s. 5(1)(ix) of the WT Act, for the material valuation date ? (2) Whether, on the facts and in the circumstances of the case, the value of the residential quarters aggregating to Rs. 25,92,401 is allowable as a deduction under s. 2(e)(ii) in the computation of the net wealth of the assessee as on the valuation date ? (3) Whether, on the facts and in the circumstances of the case, the assessee was entitled to a . Rs. Assessment year 1954-55 3,81,600 Assessment year 1955-56 22,00,008 Assessment year 1957-58 12,35,147 Total 38,16,755 deduction from the net wealth of the assessee in respect of Rs. 22,00,008 being the portion of the tax demanded for the income-tax asst. yr. 1955-56, and kept in abeyance for settlement of double income-tax relief, under s. 2(m) of the WT Act?" The Tribunal also referred the following two questions of law, at the instance of the Revenue : "(1) Whether, on the facts and in the circumstances of the case, the value of tube-wells, water supply plant (non-factory) amounting to Rs. 4,45,438 is liable to exclusion from the net wealth of the assessee under s. 2(e)(i) or to deduction under s. 5(1)(ix) of the WT Act ? (2) Whether, on the facts and in the circumstances of the case, the amounts of Rs. 3,81,600 and Rs. 12,35,147 were liable to be included in the net wealth of the assessee on a strict interpretation of s. 2(m)(iii) of the WT Act?" We take up for consideration question No. 1 referred to this Court at the instance of the assessee first of all. We have already expressed the view, in our judgment in IT. Ref. No. 146 of 1963 and IT. Ref. No. 148 of 1963, (Kanan Devan Hills Produce Co. Ltd. vs. CWT (1935) 3 ITR 105), that modern mechanised and power-driven plants and machinery may also be tools and implements for agriculture. The AAC found that stationary wire ropes and crab winches were used solely for cultivation, meaning thereby that they were used for raising agricultural crop. The Tribunal disagreed with the AAC not because those, according to the Tribunal, were not used in agriculture but because they were plant and machinery and as such were not tools and implements. For reasons given in our judgment in IT. Ref. No. 146 of 1963 and IT. Ref. No. 148 of 1963 (Kanan Devan Hills Produce Co. Ltd. vs. CWT (1968) 67 ITR 823 we hold that these also fall within s. 5(1) (ix) of the WT Act and are entitled to exclusion. So far as electrical machinery, grinding mills, welding machinery, etc., (including telephones and dusting machinery) are concerned, we are of the opinion, they may be tools and implements but that alone will not entitle the assessee to claim deduction of the value thereof in the computation of its net wealth unless it can be further established that those tools and implements were also used for the raising of agricultural produce. There is no finding to the effect that electrical mechinery, grinding mills, welding machinery, etc., valued at Rs. 3,04,210 are also used for raising agricultural crop. We, therefore, cannot give an affirmative answer in favour of the assessee on the materials before us. We merely say that these may satisfy the description of tools and machinery under s. 5(1)(ix) of the WT Act but their allowability for deduction under s. 5(1)(ix) will depend upon the further finding that they are used for the purposes of raising agricultural produce. THIS the Tribunal may decide now. So far as the motor cars and lorries valued at Rs. 41,267 are concerned, Dr. Pal was not in a position to say that they were used for the purpose of raising agricultural produce and, therefore, we are not in a position to say that those are entitled to deduction in the computation of the net wealth, under s. 5(1)(ix) of the WT Act. We answer question No. 1, referred to this Court at the instance of the assessee, partly in the affirmative and partly in the negative as indicated above. Question No. 2 concerns the value of residential quarters. In view of our judgment in IT. Ref. No. 146 of 1963 (Kanan Devan Hills Produce Co. Ltd. vs. CWT (supra)), the answer must be in the negative and against the assessee. We propose to dispose of question No. 1 referred to this Court at the instance of the Revenue, at this stage. The AAC thought that the value of tube-wells and water supply plant which were used for cultivation only was entitled to exclusion under s. 5(1)(ix). The Tribunal, on the other hand, was of the opinion that these being permanently fixed to the agricultural land, should be regarded as part of agricultural land, under s. 2(e)(i). The view taken by the Tribunal is consistent with the view taken by this Court in Tea Estates India Private Limited vs. CWT (1966) 59 ITR 428 and should be taken as correct. The value of the tube- wells and water supply plant should, therefore, be excluded from valuation of the assets under s. 2(e)(i) and the question should be answered in the affirmative and in favour of the assessee. We now return to question No. 3, referred to this Court at the instance of the assessee. Dr. Pal invited our attention to the notice of demand under s. 29 of the IT Act for the year 1955-56, the material portion of which reads as follows : "THIS is to give you notice that for the asst. yr. 1955-56 a sum of Rs. 44,58,015.09 as specified in the attached form has been determined to be payable by you.
(2.) THE amount is payable on or before the 28th March, 1967, to the Reserve Bank of India at Calcutta when, if paid, you will be granted a receipt. A challan is enclosed for the purpose. If you do not pay the amount on or before the date specified above you will be liable under s. 46 (1) to a penalty which may be as great as the tax due from you...... There is no dispute that the sum of Rs. 22,00,008 was kept in abeyance because there was the possibility of the assessee getting double taxation relief under s. 49D of the IT Act, the material portion of which reads as follows : "49D. (1) If any person who is a resident in the taxable territories in any year proves that, in respect of his income which accrues or arises during that year without the taxable territories (and which is not deemed to accrue or arise in the taxable territories), he has paid in any country, with which there is no reciprocal arrangement for relief or avoidance of double taxation, income-tax, by deduction or otherwise, under the law in force in that country, he shall be entitled to the deduction from the Indian income-tax payable by him of a sum calculated on such doubly taxed income at the Indian rate of tax or the rate of tax of the said country, whichever is the lower." Dr. Pal argued that, although the demand for the sum of Rs. 22,00,008 was kept in abeyance, the entire sum of Rs. 44,58,015.09 was debt owed by the assessee being the subject- matter of demand under s. 29 of the Indian IT Act and as such deductible from the computation of the wealth-tax of the assessee. Dr. Pal further submitted that the fact that the assessee may subsequently get relief under s. 49D and the fact that on the happening of that contingency the demand for Rs. 44,58,015.09 may be reduced and lesser amount may become payable by the assessee, as the Indian income-tax, are matters of little consequence. In the context of this argument, he reminded us of the decision of the Supreme Court in CWT vs. Standard Vacuum Oil Company Ltd. (1966) 59 ITR 569 (SC). What happened in that case was that by notices dt. 28th May, 1956, and 31st May, 1957, demands for advance tax under s. 18A of the IT Act, 1922, were made on the respondent assessee for two years. The final instalment of the amount of Rs. . Rs. Rs. Total demand . . . 44,58,015.09 Kept in abeyance . . . 22,00,008.00 . . 22,58,007.09 Paid u/s. 23B 6,37,392.13 . Paid u/s. 18A 11,10,297.00 17,47,689.13 Now payable I.T . 5,10,317.12 (sic)" 47,69,653 for each of the two years was outstanding on 31st Dec., 1956, and 31st Dec., 1957, which were the respective valuation dates for the purposes of wealth-tax for the assessment years 1957-58 and 1958-59. The respondent assessee claimed that in computing its net wealth for the purpose of wealth-tax those amounts ought to be deducted as debt, owed by it, within the meaning of s. 2(m) of the WT Act, 1957, on the respective valuation dates. The Supreme Court held that there was no substantial difference between advance tax paid under the provisions of s. 18A and the tax due and paid under a demand notice passed after an assessment; the only difference being that if the facts so warrant the assessee is enabled to pay less than the amount demand ed by the ITO. But till a new estimate be 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 s. 18A. A condition subsequent, the fulfilment of which may result in the reduction or even extinction of liability would not have the effect of converting the liability which attaches under a notice under s. 18A into a contingent liability. A debt is owed when an order under s. 18A(1) is passed and a notice of demand is sent. The amount mentioned in the notice is owed till new figure is substituted by the action of the assessee. In the view taken, the Supreme Court further held that the amount mentioned in the notices of demand under s. 18A of the IT Act, in respect of advance tax were "debts owed" within the meaning of s. 2(m) of the WT Act on the valuation dates and had to be deducted in computing the net wealth of the assessee. In our opinion, the argument of Dr. Pal should fail. The notice of demand should be interpreted as a whole. Under the said notice what was "now payable" (that is the debt due on the valuation date) was only Rs. 5,10,317.12. The demand was for that amount only. The rest of the assessed tax was kept in abeyance pending settlement of the double taxation relief matter. Demand for Rs. 44,58,015.09 was therefore a proforma demand in nature and did not mature into an actual demand. In the Standard Vacuum Oil Co. Ltd. (1966) 59 ITR 569 (SC) the demand under s. 18A was a subsisting and present demand--there remained for the assessee only to submit a fresh estimate and to pay less on its own peril. In the instant case, Rs. 44,58,015.09 was not a present demand. That distinguished the Standard Vacuum Oil Co. Ltd. case(1) from the instant case. The balance of the sum of Rs. 44,58,015.09 (that is to say the amount kept in abeyance) would be payable upon the happening of the contingency that the assessee failed to get double taxation relief. That makes the sum of Rs. 22,00,008 payable upon a contingency. In the case of Keshoram Industries and Cotton Mills Ltd. vs. CWT (1966) 59 ITR 767 (SC) the Supreme Court observed : "To summarize: A debt is a present obligation to pay an ascertainable sum of money, whether the amount is payable in praesenti or in futuro: debitum in praesenti, solvendum in futuro. But a sum payable upon a contingency does not become a debt until the said contingency has happened. A liability to pay income-tax is a present liability though it becomes payable after it is quantified in accordance with the ascertainable data. There is a perfected debt at any rate on the last day of the accounting year and not a contingent liability. The rate is always easily ascertainable. If the Finance Act is passed, it is the rate fixed by that Act; if the Finance Act has not yet been passed, it is the rate proposed in the Finance Bill pending before Parliament or the rate in force in the preceding year, whichever is more favourable to the assessee. All the ingredients of a 'debt' are present. It is a present liability of an ascertainable amount." Since we have held that the sum of Rs. 22,00,008 was a contingent liability and not a present demand, the passage quoted above is an authority which disentitles the assessee from deduction of the above sum of Rs. 22,00,008 from the computation of the value of its wealth. The answer to the question should, therefore, be in the negative and against the assessee. We now take up for consideration question No. 2 referred to this Court at the instance of the CWT. Mr. Biswarup Gupta, learned counsel for the Revenue, did not dispute that Rs. 3,81,600 and Rs. 12,35,147 were present demands and as such present debts. We are of the opinion that the assessee is entitled to the exclusion of the above sum in the computation of its wealth. We, therefore, answer the question in the negative and against the Revenue. In the circumstances of this case, we do not make any order as to costs.;