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2014 (10) TMI 435 - AT - Wealth-taxValuation of property - Section 2(ea) of Wealth Tax Act, 1957 - whether security taken for lease of asset would be treated as debt - Held that:- a security deposit taken by the assessee-lessor leads to an inflow of funds with it. He is thus without doubt better placed than a person not a receipt of the security deposit, result as it does in a corresponding increase in his cash/bank balance, which could be profitably deployed/invested. Of course, there is a concomitant liability to repay the debt on the termination of the agreement, i.e., the assessee’s assets and liabilities both undergo an increase by the same amount. It would therefore be at best a tax-neutral exercise in-as-much as, though it makes the assessee cash rich, does not enhance his net worth in view of the funds carrying an obligation of repayment, but shall not cause a decrease in his net wealth. The security deposit received from a lessee or tenant, result as it does in a corresponding asset/s with the assessee, rather places him in a more favorable position than he is on its’ non-receipt, so that the same is not a debt owed u/s.2(m). The assessee’s claim is thus not maintainable either on facts or in law. - Decided against the assessee.
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