2018 (1) TMI 17

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....lso challenged the confirmation of disallowance of claim for deduction of debts incurred in relation to the taxable assets from gross wealth. 2. Both the appeals of the assessee are time barred by 25 days in filing the appeals before the Tribunal. The assessee has filed condonation petition in support of affidavit requesting to condone the delay. By referring to the contents therein, the ld. Counsel for the assessee has submitted that the assessee was under bonafide impression that as the CWT(A) had passed a single order for two assessment years, it will be sufficient to file a single appeal against the common order. However, since the assessee was advised to file separate appeals for each assessment years, for preparation of appeal papers....

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....t and accordingly, the ground raised by the assessee is dismissed as 'not pressed'. 5. The next common ground raised in both the appeals of the assessee is with regard to confirmation of disallowance of debts incurred and claimed as deduction by the assessee. On perusal of the computation of wealth filed by the assessee, the Assessing Officer has observed that the assessee has reduced an amount of Rs.. 6,21,74,138/- for the assessment year 2001-02 and an amount of Rs..6,48,15,577/- for the assessment year 2002-03 from the gross assets as debts incurred in relation to the taxable assets. The above sum was worked out as a proportion of debt to total funds viz., 80.1%. As per the provisions of section 2(m) of the Act defining "Net Wealth", on....

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....for which a charge has been created on all the assets of the company. The assessee's authorised representative explained that the charge on the assets have been created both on movable and immovable properties of the company. He further explained that the vehicles offered as part of gross wealth are also forming part of the movable property of the company which has been offered as security for the loan. Therefore he submitted that the debt has to be allowed in working out the wealth tax liability. After considering the submissions of the assessee and on perusal of the agreement of loan entered into by the company with a consortium of banks, the Assessing Officer noticed from the agreement that the loan has been taken only to meet the wo....

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.... of credit facilities from banks or out of other borrowings such as commercial papers, short term loans and advances, fixed deposits, etc. It was further argued that the assets were neither unproductive assets/ostentatious assets which were acquired out of the above mentioned borrowings but were only business assets purchased by utilizing the said borrowings. Accordingly, in the computation of net wealth, the assessee has reduced the sum from the gross assets as debts incurred in relation to the taxable assets by working out as a proportion of debt to total funds viz., 80.1%. As per the provisions of section 2(m) of the Act defining "Net Wealth", only the debts owed by the assessee on the valuation date incurred in relation to the said asse....