TMI Blog1992 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to Rs. 43,022 under section 2(m)(ii) of the Wealth-tax Act, 1957, in Sri Krishna Gopal Gupta's wealth-tax assessment for the year 1969-70 ?" Briefly stated, the facts are that the assessee is an individual and the reference relates to the assessment year 1969-70. The assessee withdrew sum of Rs. 43,022 from a firm, Messrs. Krishna Gopal Jagat Narain, where he had already a debit balance and, on the corresponding valuation date, the debit balance stood at Rs. 68,295. In the determination of " net wealth ", the assessee claimed deduction of the said debit balance as debt owed by the assessee. However, the Wealth-tax Officer allowed deduction of Rs. 25,273 only and the balance amounting to Rs. 43,022 was not allowed with the narration " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in relation to a house property in respect of which wealth-tax was not chargeable under the Act for its value was exempt as provided under section 5(1)(iv) of the Act, and as such the assessee was not entitled to deduction of that liability in computation of his " net wealth We have considered the submission carefully but are unable to accept the same. Strictly speaking, the question in the form it is referred does not arise out of the order of the Tribunal. The contention put forward on behalf of the Revenue on the lines on which the question is referred, namely, that the liability in question was not an admissible deduction because of clause (ii) of section 2(m) of the Act was never canvassed before the Income-tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and which has been accepted to be the Hindu undivided family property." On a consideration of the orders attached with the statement of the case including that of the Income-tax Appellate Tribunal, there is nothing to indicate that the house property as such was thrown by the assessee into the common hotchpotch. On the contrary, from a perusal of the various orders, it can readily be inferred that what was thrown into the common hotchpotch, was the liquid sum of money which came to be invested by the family in the reconstruction of its own house property. This is evident from the assessment order itself when the Wealth-tax Officer made the disallowance saying that " Deduct: Investment in Hindu undivided family property". Apart from thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p to a certain value, a house or a part of the house which is exclusively used by the assessee for residential purposes was exempt from tax. The asset in relation to which the debt is secured or has been incurred, which is not to be included, wholly or partly in the net wealth, in our opinion, must have a nexus to the gross wealth of the assessee and exemption in respect of that asset should have been claimed in the determination of the net wealth. The asset must belong to the assessee. The reason for excluding the debts mentioned in section 2(m)(ii) of the Act from consideration for computation of net wealth is not too far to seek. The legislative intent is to deny double benefit to the assessee once, by exempting the value of an asset in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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