Commissioner of Wealth Tax vs Meharchand Dhandia

This reference u/s 27(1) of the Wealth-tax Act, 1957, at the instance of the Revenue, is to answer the following question of law :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee is entitled to claim deduction on account of Income Tax liability which arose as a result of a settlement order of the Commissioner of Income Tax passed on June 20, 1975, in computing the net wealth for the year under consideration ?"

The relevant assessment years are 1974-75 and 1975-76. The point involved for decision is covered by -the decision of the Commissioner of Wealth Tax, Kanpur Vs. J.K. Cotton Manufacturers Ltd., . It was held therein that the deductions claimed by the assessee were allowable in the computation of the assessee''s net wealth. Following that decision, this reference has to be answered against the revenue.

Consequently, the reference is answered against the Revenue and in favour of the assessee by holding that the Tribunal''s view in the assessee''s favour is justified.

No costs.