Judgment :- 1. The following question has been, at the instance of the Revenue, referred to us by the Income-tax Appellate Tribunal, Cochin Bench: "Whether, on the facts and in the circumstances of the case and on the interpretation of S.5 (1) (xxxii) of the Wealth Tax Act, 1957 read with R.2 of the Wealth Tax Rules, 1957, the Appellate Tribunal is justified in law in holding that the current account balance of the partners of the firm, amounting to Rs. 2,31,482/-is to be treated as capital only, that there is no element of advance in it and that, therefore, the computation of the interest of the partners in the firm has to be enhanced by this amount for the purpose of exemption under S.5(1) (xxxii) of the Wealth Tax Act, 1957" It is admitted by the assessee that the amount in question, namely, current account balance, represents the accumulated undrawn profit. This amount constitutes the assets of the partners and assessable in their hands in proportion to their respective shares (see Commr. of Income-tax, Madras v. P.R.A.L. Muthukaruppan Chettiar, (1935) 3 ITR. 208 (PC.)). 2. The claim of the assessee that undrawn profits are exempted under S.5 has no merit. That Section has no relevance to what is held by the firm as amounts due to the assessee-partner as his proportionate share of the profit. What is exempted under clause (xxxii) of S.5 (1) is the value of the assessee's interest in the assets of the firm as computed in the manner prescribed under R.2 (i) read with R.2 (h) of the Wealth Tax Rules, 1957. The interest of the assessee in the assets of the firm is his interest to receive his proportionate share upon settlement of the account consequent on the dissolution of the firm or his retirement. Such interest is excluded in determining the assets of the partners of the purpose of assessment under the Wealth Tax Act. In computing such interest the rules speak of deduction of debts owned by the firm and secured on or incurred in relation to such asset thereby excluding such liability from the computation of the interest of a partner in the assets of the firm. Profits held by the firm for distribution among the partners, according to their respective shares, are not the assets of the firm, but assets which belong to the partners. Profits held by the firm for distribution among the partners, according to their respective shares, are not the assets of the firm, but assets which belong to the partners. What is in question in the present case is the assessee's proportionate share of those profits. In adding that amount to the assets of the partner, the exemption under S.5(1) has no application whatsoever. 3. In the circumstances, we answer the question in the negative, that is, in favour of the Revenue and against the assessee. 4. We direct the parties to bear their respective costs in this Tax Referred Case. A copy of this judgment under the seal of the High Court and the signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench.