Debts - Meaning
G. ARAVINTHAN
(Querist) 19 March 2009
This query is : Resolved
Can anyone say in detail or categorically define the word debt?
is tax dues to government comes under the word "debt"
adv. rajeev ( rajoo )
(Expert) 19 March 2009
the amount payable to any body is known as debt. Tax due to govt., is also govt., debt.
G. ARAVINTHAN
(Querist) 19 March 2009
More details required sir.
Categorical details required sir
Tribhuwan Pandey
(Expert) 19 March 2009
The word 'debts' means something recoverable by an action for debt, and nothing can be recovered in an action for debt except what is ascertained or can be ascertained. A debt is a liability to pay in present or in future an actionable sum of money.
When the liability to pay income tax is there, and the assessee has set apart certain amount thought to be necessary for discharging the tax liability, the same has been ascertained and it cannot be said that the amount is not a debt (CWT Vs Ahmed Tea Co. AIR 1967 Assam 63)
The word 'debt' is applicable to a sum of money which has been promised at a future day as to a sum now due and payble
Essentials of Debt: 1. an ascertained or ascertainable, 2. an absolute liability, present or future and 3. an obligation which has already accrued and substing (AIR 1996 Mad. 74)
>money payable under an order of the court was held debt. (Lees Vs Newton LR 1 CP)
>debt include judgment-debt under s.2(1)(a)of Provincial Insolvency Act & under S.2(b)of Presidency-Towns Act
>a call on share is no a debt until actually call
>interest which could only be given by way of damages was not a debt.
>chit liability is not a debt.
A debt is a chose-in-action and is heritable and assignable and it is treated as property in India under the Transfer of Property Act which calls an 'actionable claim'
All debts are liabilities but all liabilities are not debt (commissioner wealth tax Vs Harrison AIR 1965 Ker 209)Likewise, every loan is a debt but every debt is not necessarily a loan (AIR 1949 Nag 104)
G. ARAVINTHAN
(Querist) 20 March 2009
Thanks Mr.Pandey.
Whether tax due to government is a debt?
A. A. JOSE
(Expert) 20 March 2009
Yes, Mr.Pandey has well dealt with the question and I thank him too.
Hiralal Das
(Expert) 04 April 2009
I agree with the opinions of my learned members friend. You may follow them.
Sachin Bhatia
(Expert) 02 October 2009
A debt is created when a creditor agrees to lend a sum of assets to a debtor.
