COMMISSIONER OF WEALTH TAX Vs. NARAYANDAS J HEMANI

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Indore, has referred the following question for our opinion under Section 27(1) of the W.T. Act:

(2.) FOR the assessment year 1974-75, assessment was completed on a net wealth of Rs. 96,000. On going through the records, the WTO found that the assessee had claimed a deduction in the original assessment in respect of a loan amounting to Rs. 35,005 taken from the Life Insurance Corporation of India on the security of his LIC policies under Section 2(m)(ii) of the W.T. Act. The WTO was of the opinion that no deduction from the total wealth was admissible in respect of the loan secured on the insurance policies which were exempted assets. Notice under Section 17(b) of the W.T. Act was issued and in response thereto the assessee filed a return of wealth showing the net wealth at Rs. 95,044. The WTO added Rs. 35,005 on the ground that this deduction was incorrectly allowed in respect of the loan secured against the LIC policies.

(3.) SECTION 2(e) mentions the properties which are not included in the definition of asset. We need not reproduce all the items which are excluded from the definition of assets in SECTION 2(e) of the Act because it is not necessary for our purposes to do so.