A debt due to an assessee cannot be excluded from the computation of his net wealth, because it is an item of asset and not an item of liability in his hands.

( 1 ) THE following questions of law of great importance are involved in this reference under Section 27 (1) of the Wealth-tax Act, 1957, hereinafter stated as the " Act" :" (a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the 'outstandings' due to the firm constituted assets the value of which was required to be included in its net wealth for the purpose of assessing the assessee's interest therein ? (b) If the answer to question No. 1 is in the affirmative whether the value of the 'outstandings' should not be reduced by (i) the estimated tax payable by the firm on the outstandings ? and (ii) the estimated tax payable by the assessee on his share therein ? (c) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the principle and method of valuation of the outstandings as adopted by the Appellate Assistant Commissioner ? "

( 2 ) THE assessment year is 1964-65, and the valuation date is March 31, 1964. M/s. Om Dignam and Co. , a firm of solicitors, is hereinafter stated as the "firm" The assessee is a partner of the firm. The firm maintains its books on cash basis. The firm is entitled to get costs from its clients and has submitted the bills to them. In the assessment year, the firm did not include in its balance sheet these unrealised sums, hereinafter stated as the "outstandings". The Tax Officer has included them in the balance sheet on the ground that these outstandings are the assets of the firm and arc includible in the computation of the net wealth of the assessee and on estimate, has determined the assessee's share in these outstandings at Rs. 2,50,000.

( 3 ) THE Appellate Assistant Commissioner, on appeal by the assessee, has directed the Tax Officer to determine the assessee's share in the net wealth of the firm, under Rule 2 of the Wealth-tax Rules, 1957, by taking these outstandings into account in accordance with the percentage determined by him. And, save as to certain matters, the Appellate Tribunal has affirmed the decision of the Appellate Assistant Commissioner and has also passed an order under Section 35 of the Act with which we are not concerned.

( 4 ) MR. Ginwalla, the learned counsel for the assessee, has accepted the percentages determined by the Appellate Assistant Commissioner without prejudice to his following submissions : (i) In Sandersons and Morgans v. Mohanlal Lalluchand Shah, it has been held that a solicitor is entitled to a reasonable and fair remuneration that may be allowed by the court on taxation of his bills in terms of the Rules of the Original Side of this court relating to the taxation of the bill of costs. Therefore, the amounts specified in these bills are unascertained sums of money, because these bills are liable to be taxed under our taxation rules, Hence, these out standings are not debts within the meaning of the terms "debt", for a "debt", as stated in Mulla's Transfer of Property Act (5th edn.) at p. 794. "is an obligation to pay a liquidated or certain sum of money ". Further, a reasonable remuneration is not a debt, for it is a compensation and, therefore, these outstundmgs are not at all debts. Hence, they are not the assets of the firm and should be excluded from the computation of the net wealth of the assessee. (ii) Section 2 (e) of the Act defines the term "asset", but in order to determine whether these outstandings are assets or not the court should take into consideration Section 7 (1) of the Act which provides that the valuation of any asset, other than cash, shall be estimated to be the price, which in the opinion of the Tax Officer, it would fetch if sold in the open market on the valuation date. There is no market in which these bills of the firm can be sold. In any event, nobody will buy the solicitor's bill, because the Rules of the Original Side of this court do not provide for taxation of the bill of costs at the instance of an assignee who will be le