1,45,87,000/ to the companyts of the said fixed assets.
During the year ended March 31, 1950, the companypany made a revaluation of its assets and added an amount of Rs.
V. Viswanatha Sastri, N. D. Karkhanis, R. N. Sachthey, B. R. G. K. Achar and R. H. Dhebar, for the respondent.
After certain adjustments, the value of the fixed assets was fixed at Rs.
A. Palkhivala, S. T. Desai, R. K. Chaudhury, S. Murthi .and B. P. Maheshwari, for the appellant.
2,60,52,357/ .
The Judgment of Subba Rao and Sikri, JJ.
He also disallowed the claim of the assessee in respect of the proposed dividend and estimated income tax and super tax on the ground that the said items were number debts on the valuation date, i.e., March 31, 1957, within the meaning of s. 2 m of the Wealth Tax Act.
The said fixed assets of the assessee were shown in the balance sheets issued by the assessee from time to time at the added value less depreciation calculated on the original companyt.
Appeal from the judgment and order dated May 14, 1962 of the Calcutta High Court in Wealth Tax Reference No.
was delivered by Subba Rao J. Shah, J. delivered a dissenting Opinion.
In the balance sheet of the relevant accounting year also the said amount was shown as the value of the fixed assets.
The Directors cannot distribute dividends but they can Only recommend to the General Body of the Company the quantum of dividend to be distributed.
In the profit and loss account for the said year a sum of Rs.
Hence the present appeal.
539 of 1964.
2,30,32,833/ .
15,29,855/ was shown as the amount of dividend proposed to be distributed for that year.
Subba Rao, J. Kesoram Industries and Cotton Mills Limited, the appellant herein, is a companypany incorporated under the Indian Companies Act.
2,29,99,125/ .
84,76,690/ was shown as the .axes paid during the said accounting year.
The said balance sheet as on March 31, 1957, also showed a provision for taxation amounting to Rs.
Its subscribed capital at the end of the relevant accounting year ending March 31, 1957, was Rs.
178 of 1960.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
1,03,69,009/ and as against the said amount a sum of Rs.
In companyputing the net wealth for the purposes of Wealth Tax Act, 1957, the Wealth Tax Officer accepted the said valuation of the fixed assets under s. 7 2 of the said Act, rejecting the plea of the assessee that each item of the assets should be valued at the market rate under s. 7 1 thereof.
The said amount was declared as dividend at the General Body Meeting of the assessee held on November 27, 1957.
The original companyt of the said assets was Rs.
An obligation to account does number give rise to a debt, for the liability to pay will arise only after the accounts were taken and the liability was ascertained.
The High Court answered the three question against the assessee.
30,305/ .
The Finance Act came into force on April 1, 1957.
Or appeal, the said order was companyfirmed by the Appellate Assistant Commissioner except to the extent of outstanding demand of income tax for Rs.
