1991 (3) TMI 12

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....eduction of this amount of Rs. 77,425 from his wealth in terms of section 2(iii)(ii) of the Wealth-tax Act, 1957. The contention was that the loan was raised on the security of an exempted asset. This claim for deduction was rejected and the appeal before the Appellate Assistant Commissioner also failed. The assessee preferred further appeal before the Appellate Tribunal. The Tribunal held that since the fixed deposit receipt was not fully exempt from tax, the loan cannot be said to have been raised on the security of the exempted asset. The Tribunal, therefore, found that the debt to the extent of Rs. 77,425 qualified for deduction as a liability in computing the assessee's net wealth. The appeal succeeded and the deduction claimed was all....

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....see if it is held that it was incurred on the security of the fixed deposit of Rs. 1 lakh in the Dena Bank and further that this security is not chargeable tinder the Act. According to section 5(1)(xxvi) of the Act, wealth-tax shall not be payable by an assessee in respect of any deposits with a banking company to which the Banking Regulation Act, 1949 (10 of 1949), applies and the deposits in such bank by the assessee shall not be included in the wealth of the assessee for the purposes of computing wealth-tax. There may not be much difficulty in applying these provisions when the whole debt is incurred on the security of the entire deposit in the bank. (See T. V. Srinivasa an v. CWT [1980] 123 ITR 464 (Mad), CWT v. Premnarayan Garg [198....

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.... deduction of the aggregate value of all his debts, this has to be ascertained with reference to section 2(m)(i) and (ii). Section 2(m)(ii), as we have seen above, speaks of debts secured on or which have been incurred in relation to any property in respect of which wealthtax is not chargeable under the Act. It must, therefore, follow that debts which are secured on, or which have been incurred in relation to any property which has not been taken into the reckoning for the purposes of arriving at the net wealth have to be excluded and debts which are secured on, or which have been incurred in relation to any property which have been taken into account have to be deducted from the aggregate value of the assets. A Full Bench of the Madras ....