JUDGMENT

PATHAK, J.:—This appeal is directed against the judgment of the Gujarat High Court disposing of a wealth-tax reference and answering against the Revenue the following two questions:

"Whether on the facts and in the circumstances of the case the assessee is entitled to the deduction of-

(i) income-tax liabilities for the assessment years 1962-63, 1963-64 and 1964-65; wealth-tax for the assessment year 1964-65 and gift-tax for the assessment years 1962-63 to 1964-65 as determined payable on the basis of the assessment orders passed after the valuation date, and

(ii) income-tax liability for the assessment years 1958-59 and 1960-61 and wealth-tax liability for the year 1961-62 created as a result of rectification orders passed after the relevant valuation date in determining the value of the net wealth?"

In assessment proceedings under the Wealth-tax Act for the assessment year 1964-65, the respondent assessee claimed a deduction of Rs. 2,42,535/- in the computation of her net wealth, on the ground that the amount represented the assessees tax liabilities for different years. The Wealth-tax Officer rejected the claim. An appeal by the assessee was allowed by the Appellate Assistant Commissioner, who held the assessee entitled to the deduction claimed but remanded the case to the Wealth-tax Officer for verifying the arithmetical accuracy of the claimed deductions. The Wealth-tax Officer appealed to the Appellate Tribunal. He contended that the assessees claim to the deduction of income-tax liabilities for the assessment years 1962-63, 1963-64 and 1964-65, the wealth-tax liability for the assessment year 1964-65 and the gift-tax liabilities for the assessment years 1962-63, 1963-64 and 1964-65 determined on the basis of assessments completed after the valuation date were not admissible deductions in computing the net wealth, and that in any event, the deductions should have been allowed on the basis of the returns filed and not on the basis of the assessment orders. The Appellants Tribunal rejected the contention in view of the judgment of this Court in Kesoram Industries Pvt. Ltd. v. Commr., of W. T., (1966) 59 ITR 767 and H. H. Sethu Parvati Bayi v. Commr. of Wealth-tax, Kerala (19") 69 ITR 864 (SC). The Wealth-tax Officer., also contended that the income-tax liability for the years 1958-59 and 1960-61 and the wealth. tax liability for the year 1961-62 created as a result of rectification orders made after the valuation date were not admissible deductions. This contention was also rejected by the Appellate Tribunal. Finally the Wealth Tax Officer pointed out that the tax liabilities were not deductible in view of the provisions of Section 2 (m) (iii) of the Wealth Tax Act. The Appellate Tribunal observed that this aspect of the case had not been considered by the Appellate Assistant Commissioner and, accordingly, the Appellate Tribunal directed the Appellate Assistant Commissioner to consider the case again and determine which of the liabilities were covered by the provisions of Section 2 (m) (iii). On a reference being made to the Gujarat High Court at the instance of the Revenue on the questions of law set forth earlier, the High Court held that both questions were concluded by its judgment in Commissioner of Wealth tax, Gujarat II v. Kantilal Manilal, (1973) 88 ITR 125 and answered the questions in the affirmative.

2. As regards the first question, we have already expressed our view on the point in our judgment in Commr. of Wealth Tax, Gujarat, Ahmedabad v. Vadilal Lallubhai in Civil Appeals Nos. 1524 to 1547 of 1973; (reported in 1983 Tax LR 1654) (SC. We need add nothing more on that point, and answer the question in the affirmative.

3. The second, question raises the point whether the income-tax liability and wealth tax liability created in consequence of rectification orders passed after the relevant valuation date can be the subject of a claim to deduction in the computation of an assessees net wealth, It appears from