CALCUTTA TRAMWAYS CO. LTD. vs COMMISSIONER OF WEALTH TAX

The Supreme Court held that under Section 6 of the Wealth-tax Act, 1957, the amounts in the special reserve and shareholders' account, as well as debenture loans, are not deductible in ascertaining the net wealth of a non-resident company. The Court clarified that until the company was acquired by the Government, these amounts remained assets of the company, and the shareholders had no rights to them. The judgment followed the precedent set in Kesoram Industries and Cotton Mills Ltd. v. Commissioner of Wealthtax (Central), Calcutta, 59 I.T.R. 767.