APOORVA SHANTILAL HUF Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) COMMON question which arises for our consideration in these references under S. 27(1) of the W. T. Act, 1957 (hereinafter referred to as "the Act"), is whether the assessee is entitled to claim the deduction of a loan taken from the Life Insurance Corporation, which is secured on a life insurance policy while computing his net wealth. This question arises in the context of the provision contained in sub cl. (ii) of cl. (m) of S. 2 of the Act.

(2.) THE assessee in each of these references holds a life insurance policy. He took a loan on the security of a life insurance policy. It was claimed that while computing his net wealth, this loan amount should be deducted from the aggregate value of all his assets. The wealth tax authorities and the Tribunal negatived this claim, taking the view to the effect that as the debt in question was secured on the property in respect of which wealth tax was not chargeable, it could not be deducted from the aggregate value of the assets of the assessee under sub cl. (ii) of cl. (m) of S. 2 of the Act. It is this view, taken by the Tribunal and the wealth tax authorities, which is challenged before us in these references.

(3.) SEC . 4 provides for the inclusion of certain assets as belonging to an individual in the computation of his net wealth. Sec. 5 provides for exemption in respect of certain assets and, to the extent it is relevant, it reads as follows :