( 1 ) THIS Reference under sec. 27 (1) of the Wealth Tax Act 1957 raises some interesting and important questions relating to the construction of sec. 2 (m) and sec. 7 of the Wealth Tax Act which have been argued with considerable vigour and ability by both the sides. One of the noteworthy features of this case is that some cases have been relied upon by both the sides in order to deduce contrary conclusions. The Raipur Manufacturing Company Limited is the assessee in this case. The assessment year in question is the year 1957-58 the relevant valuation date being the 31st December 1956. On 11th May 1956 a demand notice had been issued on the assessee under sec. 18-A of the Indian Income-Tax Act 1922 for advance payment of tax requiring the Company to pay a sum of Rs. 3 59 549 in four instalments the instalments being payable on the 15th June 1956 the 15th September 1956 the 15th December 1956 and the 15th March 1957. Prior to the valuation date the assessee paid the three instalments payable on the 15 June 1956 the 15th September 1956 and the 15th December 1956. On the 31st December 1956 the fourth instalment of Rs. 89 889 had remained unpaid the same being payable on the 15th March 1957. On the 13th February 1957 a revised demand was made under sec. 18-A requiring the assessee to pay a sum of Rs. 4 2 68 instead of Rs. 89 889 on the 15 March 1957. This amount of Rs. 4 2 68 was duly paid by the assessee. The assessee submitted its wealth-tax return for the year 1957 On the 26th September 1457 a demand notice was issued against the assessee under sec. 23b of the Indian Income-tax Act 1922 for A sum of Rs. 8 28 576 on the basis of the assessees return of income after adjusting the advance payments of tax made by the assessee The Wealth lax Officer computed the net wealth of the assessee as stated in his assessment order dated 31st January 1958. The paid up capital was assessed at Rs. 30 0 0 and the Reserve and Surplus as per balancesheet at Rs. 1 12 39 79 He added to these two amounts three sums which were claimed by way of liabilities by the assessee which he did not regard as constituting debts. One represented a provision for taxation amounting to Rs. 21 62 785 the second represented the amount of the proposed dividend of Rs. 5 83 188 and the third related to over provision in sundries amounting to Rs. 11 341 The total of all these five items came to Rs. 1 69 96 393 The Wealth Tax Officer deducted thereout the value of the shares held by the assessee in other companies which were exempt from inclusion in the wealth of the assessee amounting to Rs. 24 51 416 and the advance tax paid amounting to Rs. 9 37 943 The net value of assets which was made the subject matter of tax amounted to Rs. 1 36 7 34 In the course of the assessment proceedings the assessee claimed inter alia a deduction in respect of the sum of Rs. 21 62 785 on account of provision for taxation. The sum of Rs. 21 62 785 was made up as follows:- In the balancesheet the assessee had made a provision for Rs. 14 32 275 for taxation. The assessee had carried forward from the previous year a sum of Rs. 7 30 510 on account of provision for taxation. These two amounts totalled Rs. 21 62 785 The assessee having made a provision of Rs. 21 62 785 for taxation in its books of account claimed that the assessee was entitled to a deduction in respect thereof. There was another sum of Rs. 3 0 0 for which deduction was claimed. The relevant facts in connection with this claim are as under: In the balance sheet as at 31st December 1955 the assessee had shown the gross bloc at Rs. 86 29 43 As against this amount there was a depreciation fund amounting to Rs. 60 39 883 The Companies Act 1956 came into force on 1st April 1956. By sec. 211 it is provided that every balance sheet of a company shall give a true and fair view of the state of affair: of the company as at the end of the financial year and shall subject tn the provisions of the said section be in the Form set