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Issues:
1. Valuation of loan advanced to Panipat Woollen Mills Ltd. 2. Disallowance of claim of exempted assets from the share capital of the firm. Issue 1: Valuation of loan advanced to Panipat Woollen Mills Ltd. The case involved appeals by the revenue under the Wealth-tax Act for the assessment years 1974-75 and 1975-76 regarding the valuation of a loan advanced by the assessee to Panipat Woollen Mills Ltd. The assessee claimed the value of the loan at nil, while the WTO and AAC valued it at Rs. 34,370 and Rs. 11,457, respectively. The loan became time-barred in 1970, and despite the assessee's efforts for recovery, it remained unpaid. The AAC ordered inclusion of one-third of the loan's value. The tribunal held that since the loan was time-barred and efforts for recovery were futile, the market value of the loan remained nil. The appeals by the revenue were dismissed, and the cross-objections of the assessee were allowed. Issue 2: Disallowance of claim of exempted assets from the share capital of the firm The second issue pertained to the disallowance of a claim of Rs. 19,760 being the value of exempted assets from the share capital of the firm in which the assessee was a partner. The firm, Pritam Preet Mohinder Singh Jain & Co., held exempted assets such as fixed deposit receipts. The WTO added the share capital of the assessee but did not allow the exemption claimed. The AAC upheld the disallowance stating that a partner's interest in a firm does not entitle them to specific rights in firm assets. The tribunal considered relevant sections of the Act, Wealth-tax Rules, and various case laws. It concluded that the partner's interest in firm assets should be considered for exemption under the Act. The cross-objection of the assessee was allowed, and the revenue's appeals were dismissed. ---
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