( 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