| Case ID |
216a6580-43c3-41a7-b764-51c473ee9301 |
| Body |
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| Case Number |
CIVIL APPEAL Nos. 66 AND 67 OF 1965 |
| Decision Date |
Nov 24, 1965 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled that the amount set apart by the Assam Oil Company Ltd. as an estimated provision for future tax liabilities was indeed a debt owed by the assessee under section 2(m) of the Wealth-tax Act. The court clarified that this provision, along with the final installment due under section 18A of the Income-tax Act, constituted debts that should be considered in computing the net wealth of the assessee. The decision reversed the Calcutta High Court's ruling regarding the first question, affirming that the tax liability is indeed a debt owed by the assessee as of the valuation date. This judgment reinforces the precedent set in prior cases, emphasizing the importance of accurately recognizing tax liabilities in wealth calculations. |
| Summary |
In the case of Assam Oil Co. Ltd. v. Commissioner of Wealth Tax, the Supreme Court of India addressed critical issues relating to the definition of net wealth under the Wealth-tax Act, 1957. The case revolved around whether amounts set aside by the assessee as provisions for future tax liabilities could be classified as debts owed under section 2(m) of the Act. The Court noted that such provisions do indeed qualify as debts, thus impacting the net wealth computation significantly. This ruling is pivotal for future assessments of wealth tax and underscores the necessity for companies to accurately report their tax liabilities. The decision also referenced earlier judgments, including Kesoram Industries and Standard Vacuum Oil, reinforcing the legal stance on tax liabilities as debts. This case serves as a significant reference point for tax law practitioners and companies alike, highlighting the importance of compliance and accurate financial reporting. |
| Court |
Supreme Court of India
|
| Entities Involved |
Commissioner of Wealth Tax,
Assam Oil Co. Ltd.
|
| Judges |
K. Subba Rao,
J.C. Shah,
S.M. Sikri
|
| Lawyers |
A.V. Viswanatha Sastri,
N.D. Karkhanis,
R.H. Dhebar,
B.R.G.K. Achar,
R.N. Sachthey,
N.A. Palkhivala,
T.A. Ramachandran,
J.B. Dadachanji,
B.R.L. Iyengar,
D.N. Gupta
|
| Petitioners |
Assam Oil Co. Ltd.
|
| Respondents |
Commissioner of Wealth Tax
|
| Citations |
1966 SLD 367 = (1966) 60 ITR 267
|
| Other Citations |
Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767 (SC),
CWT v. Standard Vacuum Oil Co. Ltd. [1966] 59 ITR 569 (SC),
Assam Oil Co. Ltd. v. CWT [1963] 48 ITR 49 (Cal.)
|
| Laws Involved |
Wealth-tax Act, 1957
|
| Sections |
2(m),
18A
|