Law: Wealth Tax Act, 1957

Section: 7(2),7(1),2(m),27,7(2)(a)

Law: Wealth Tax Act, 1957

Section: 7(2),7(1),2(m),27,7(2)(a)

Law: Indian Companies Act, (I of 1956)

Section: 211,217

Section 7 of the Wealth-tax Act, 1957 - Valuation of assets - Immovable properties - Assessment year 1957-58 - For assessment year 1957-58, assessee-company had made a revaluation of its assets and shown in balance sheet appreciated value on revaluation of assets introducing a certain sum in capital reserve surplus - WTO accepted said valuation of fixed assets under section 7(2) rejecting plea of assessee that assets should be valued at market rate under section 7(1) - Whether since there was nothing on record to disclose why figures showed in balance-sheet did not represent correct value of assets, WTO was justified in accepting said valuation of fixed assets - Held, yes Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Debt owed - Assessment year 1957-58 - Directors of assessee-company showed in profit and loss account for relevant assessment year a sum as dividend proposed to be distributed for that year and declared said amount as dividend at general body meeting of company - Whether since directors could not distribute dividends but could only recommend to general body of company quantum of divided to be distributed and as on valuation date nothing had happened than a mere recommendations by directors as to amount of dividend to be distributed, it could not be said that there was any debt owed by assessee to shareholders on valuation date - Held, yes Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Debt owed - Assessment year 1957-58 - Whether liability to pay income-tax is a debt within meaning of section 2(m) and, therefore, deductible in computing net wealth of an assessee - Held, yes FACTS During the year ended 31-3-1957, the assessee-company had made a revaluation of its assets. The balance-sheet as on 31-3-1957, showed the appreciated value on revaluation of the assets at Rs. 2,60,52,357 and a certain sum, was introduced in capital reserve surplus: representing the increase in the value of the assets. Further the directors of the assessee-company showed in the profit and loss account for the said year a sum of Rs. 15,29,855 was shown as the amount of dividend proposed to be distributed for that year. The said amount was declared as…

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