VEERASWAMI J.

This reference under section 27(1) of the Wealth-tax Act, 1957, refers to the assessment years 1957-58 and 1958-59 and involves the scope of sub-clause (ii) of clause (m) of section 2 of the Act and its applicability to the facts of this case. The assessee is a public limited company carrying on business of different types including as hotel-keepers and caterers. For each of the two years, it has been assessed to wealth-tax. The assessee claimed that a debt of Rs. 31, 26, 000 should be taken into account in ascertaining its net wealth. The claim was negatived by the revenue, and the Tribunal concurred with it. The following question has been, therefore, referred to us

"Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the claim of the assessee for the deduction of Rs. 31, 26, 000 was rightly rejected and coming under section 2(m)(ii) of the Wealth-tax Act ?" *

The assessee acquired, pursuant to a resolution of its board of directors, dated October 22, 1929, 1, 59, 924 preference shares out of 1, 60, 000 preference shares and 1, 99, 948 equity shares out of 2, 00, 000 ordinary shares issued by G. F. Kellner and