SABYASACHI MUKHARJI, J.

( 1 ) FOR the assessment year 1957-58, for which the relevant valuation date was 31st March, 1957, M/s. Banarashi Prasad Kedia filed a return of net wealth in the status of a Hindu undivided family. From the gross value of the assets shown, the assessee claimed a sum of Rs. 3,81,098 on account of income-tax liability as a deduction before arriving at the net wealth. The Income-tax Officer disallowed the entire amount on the ground that this was not admissible under the Act.

( 2 ) THE assessee preferred an appeal from the decision of the Wealth-tax Officer to the Appellate Assistant Commissioner. It was contended before the Appellate Assistant Commissioner that the Wealth-tax Officer should have allowed deduction of income-tax liabilities before arriving at the net wealth of the assessee. The amount mentioned in the grounds of appeal before the Appellate Assistant Commissioner on account of income-tax liability was only Rs. 3,81,098 but in a statement filed at the time of hearing of the appeal before the Appellate Assistant Commissioner this amount had been shown as Rs. 7,47,181. It appears that the said sum of Rs. 7,47,181 consisted of the following items : Rs. P.  

(a) Income-tax Investigation Commission's demands outstanding in respect of liabilities under section 34 (1b) of the Indian Income-tax Act, 1922

2,66,737. 00

(b) Income-tax liabilities for 1951-52 and 1952-53 assessment years 94,983. 00

(c) Income-tax liabilities for 1953-54 to 1957-58 assessment years 3,85,561. 00

TOTAL

7,47,181. 00

( 3 ) THE Appellate Assistant Commissioner rejected the entire claim of the assessee and held that no portion of the sum of Rs. 7,47,181 claimed by the assessee as deduction could be allowed as debt owed within the meaning of Section 2 (m) of the Wealth-tax Act, 1957.

( 4 ) THE assessee thereafter preferred an appeal to the Tribunal. Though in the grounds of appeal, the assessee had claimed that the entire sum of Rs. 7,47,181 should be allowed as deduction before arriving at the net wealth of the assessee, in the course of hearing before the Tribunal it was conceded on behalf of the assessee that only the following two claims could be made, namely : Rs.  

(i) Demands outstanding in respect of Income-tax Investigation Commission under section 34 (1b) of the Indian Income-tax Act, 1922 2,66,737

(ii) Demand in respect of assessment year 1952-53 for which demand notices had been served on the assessee by the valuation date 30,626

( 5 ) AS regards item No. (i) it appears that although the demand notice in respect of a large sum of money had been served on the assessee in December. 1954, the income-tax authorities had granted an instalment scheme for the payment of the same and according to the said scheme, the assessee had been paying, The sum of Rs. 2,66,737 represented the "outstanding" amount in respect of instalments falling due after the relevant valuation date, namely, 31st March, 1957. The Tribunal held that the said sum of Rs. 2,66,737 was a debt owed and as the said sum had not become due and payable under the instalment scheme it was not outstanding for a period of more than twelve months within the meaning of Section 2 (m) (iii) (b) of the Wealth-tax Act, 1957. The Tribunal, therefore, directed that the said sum of Rs. 2,66,737 should be allowed as deduction as a debt within the meaning of Section 2 (m) of the Act. So far as item No. (ii) being a sum of Rs. 30,626 is concerned the Tribunal came to the conclusion that this was also a debt which was to be deducted in computing the net wealth of the assessee.

( 6 ) THE following question has been referred to this court under Section 27 (1) of the Wealth-tax Act, 1957:"whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the demands remaining unpaid in respect of instalments falling due after the valuation date cannot be treated to be 'outstanding' for a period of more than 12 months on the

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