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(b) that it computes net wealth by deducting the debts and liabilities of the assessee. The fallacy in such an argument lies in the confusion between the basis of the tax and its incidence. The basis of the tax is the capital value of the assets except agricultural land. Agricultural land had to be excepted from the tax by reason of the restricted legislative power granted in respect of the subjectmatter in entry 86. The power in respect of that subject-matter in its turn was restricted by a definite policy in distributing power under which the, field of legislation in agriculture was left to the States as was also the case under the Government of India Act, 1935. The exclusion of agricultural land from entry 86 would' not by itself, therefore, mean that the tax is not one on the capital value of assets. In determining the incidence, the legislature may, as well take into account various factors such as fairness to the assessee and tax the capital value of his net wealth by allowing deduction of his debts and liabilities from the gross. value. That again would not change the character of the tax. Prof. Nicholas Kaldor, who is regarded as the person on whose recommendations in his Report on Indian Tax Reform, 1956 the wealth tax was imposed, himself thought that the tax fell under entry 86 in List I. His recommendation was that on the grounds of both equity and administrative efficiency, the tax should be comprehensive, i.e., ,extending to all forms of property, but that such a tax which would ,include agricultural land would necessitate a constitutional amendment. He would not have stated so, if he thought the tax, he was suggesting, did not fall under entry 86 in List I.(1) According to Tanabe, the term "Net Wealth Tax" is a tax annually imposed ,on the net value of all assets less liabilities. Such a deduction distinguishes the tax from property taxes, in that it is not directly ,on the property and unlike taxes, such as death duties and capital levy, it takes into consideration the taxable capacity of the assessee by deducting his debts and liabilities from the gross value of his assets. The tax, therefore, is on the person of the assessee as I against the property tax which is imposed on the property itself directly(2). In Sweden also, where the wealth tax has been a 'feature of the tax structure, taxable wealth is defined as the capital 'value of an assessee's assets at the end of his income year to the extent that that value exceeds the capital value of his debts(3). The basis of the wealth tax thus is the capital value of the assets held by an assessee on the relevant-valuation date. The fact that a particular tax excludes one or more of the assets or allows from its incidence certain deductions, such as debts and liabilities, pertain to the field of computation and not the basis of the tax which is the capital value of assets. Indeed, in all cases which have so 'far come up before this Court or before the High Courts, it was never the contention of the Union of India that the Wealth Tax Act did not fall under entry 86 in List I. In S. C. Nawn v. Wealth Tax Officer (4) an order of assess- ment and penalty, and notices of demand for the recovery of the tax under the Act were challenged on three grounds; (i) that the tax was chargeable only on the accretion of wealth during the financial year, i.e., on the wealth which accrued during the accounting year (ii) that it could not have been the intention of Parliament to charge the same assets or wealth year after year, and (1) Prof Kaldor, Report on Indian Tax Reform, (1956), p. 26. (2) Richard M. bird and Oilver Oldman, Readings on Taxation in Developing countries, p. 281.