SRINIVASAN T V Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) FOR the assessment year 1972-73, the following question has been referred to this court under. s. 27(1) of the W.T. Act :

(2.) WE shall first take up for consideration the reference for the assessment year 1972-73. The assessee borrowed Rs. 40,000 from the Life Insurance Corporation of India on March 10, 1971, on the security of his house bearing door No 3, Ganesh Street, Gopalapuram, Madras, where he was residing. He invested Rs. 30,000 out of the said amount of Rs. 40,000 in fixed deposit with Canara Bank for a period of one year on March 12, 1971. The deposit was repayable on March 12, 1972. In the meantime, he borrowed moneys from the said bank on the security of the said fixed deposit and the borrowed amount were utilised as follows :

(3.) SECTION 3 of the W.T. Act provides for a charge in respect of the net wealth for every assessment year, on the corresponding valuation date of every individual and HUF. SECTION 4 provides for the inclusion of certain assets as belonging to the individual in computing his net wealth. SECTION 5 provides for exemptions in respect of certain assets, and, to the extent relevant, it runs as follows :