COMMISSIONER OF WEALTH TAX, KANPUR vs M/S. J.K. COTTON MANUFACTURERS LTD.

The Supreme Court held that under Section 2(m) of the Wealth Tax Act, 1967, liabilities that are outstanding for more than 12 months on the valuation date cannot be deducted from net wealth. The Court affirmed the High Court's ruling that the unpaid tax liabilities resulting from the Income Tax Investigation Commission's orders are not allowable as deductions since they do not relate to the declared assets of the assessee-companies. Consequently, the appeals by the Revenue were dismissed, upholding the disallowance of the claimed deductions.