- (1.) FOLLOWING questions have been referred by the Tribunal for our answer in RA No. 1606/Del/1984 for the assessment year 1976 -77: 1. Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the tax liability of Rs. 10,76,380 resulting on account of settlement pertaining to the assessment years 1958 -59 to 1971 -72 arrived at with the Commissioner on 24 -3 -1975 was allowable as a deduction under Section 2(m)(iii) of Wealth Tax Act, 1957 ?
(2.) WHETHER on the facts and circumstances of the case the Tribunal was justified in holding that M/s Hazarimal Milapchand Soorana was an industrial undertaking within the meaning of Explanation to Section 5(1)(xxxi) and as such the assessee was entitled to deduction under Section 5(1)(xxxi) of WT Act, 1957?. 2. Brief facts relevant to the first question are that in the assessment year 1976 -77, assessee claimed deduction of Income Tax liability of Rs. 10,76,380 and wealth -tax liability of Rs. 1,143 pertaining to the assessment years 1958 -59 to 1971 -72. It was contended by the assessee that as a result of settlement arrived at between the assessee and Commissioner on 24 -3 -1975. This date fall relevant for the valuation of the assessment year 1976 -77 and thereby amount of tax liability was deductible from the total value of assets. The Wealth Tax Officer allowed (sic -disallowed) assessees claim on the ground that liabilities were pertaining to the earlier assessment years and thereby those liabilities were outstanding for a period of more than 12 months on Deepawali of 1975 and as such were not liable to be deducted under Section 2(m)(iii) of the Wealth Tax Act, 1957. Aggrieved by the order of the Wealth Tax Officer, an appeal was preferred by the assessee and claim of the assessee was accepted and the amount of tax liability was ordered to be deducted from the net wealth. Further, appeal was preferred by the revenue before the Tribunal which was decided in favour of the assessee. Hence, reference of question No. 1.
(3.) THE counsel for the revenue submits that in view of the provisions of Section 2(m)(iii) of the Wealth Tax Act, 1957, the amount was outstanding for a period of more than 12 months on the valuation date and thus was not deductible from the net wealth. It is urged that the question may be answered in favour of the revenue.;