9911796707
TMI Blog1983 (12) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment year 1973-74, Rs. 6,63,304 for the assessment year 1974-75 and Rs. 7,00,233 for the assessment year 1975-76. The WTO, however, held that these debts were incurred in relation to and for the purpose of acquisition of shares the value of which amounted to Rs. 10,54,017 for the assessment year 1973-74, Rs. 10,22,919 for the assessment year 1974-75 and Rs. 8,33,853 for the assessment year 1975-76. He, therefore, disallowed the claim of deduction of the debts in the same proportion as the value of shares exempt from tax bore to the total value of the shares. The result was that out of the claim of debts which according to the assessee were to be deducted in working out the assessee's net wealth, the WTO disallowed Rs. 90,976 for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of the asset which is otherwise includible in the assessee's net wealth. He also referred to the example given in the Board's circular that if there was a debt of Rs. 1 lakh secured or incurred in relation to a house property of the value of Rs. 1,50,000 which was entitled to exemption up to Rs. 1 lakh, the debt will have to be allowed to the extent of Rs. 50,000 being the value of the house property which was otherwise includible in the net wealth. Relying on the authority of the Hon'ble Supreme Court in the cases of Navnit Lal C. Javeri v. K.K Sen, AAC [1965] 56 ITR 198, Ellerman Lines Ltd. v. CIT [1971] 82 ITR 913 and K.P Verghese v. ITO [1981] 131 ITR 597, Shri Jain contended before us that the Board's instructions, particularly tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enge the finding of fact of the WTO in the assessment orders that the debts were incurred in relation to and for the purpose of acquisition of shares, the value of which to the extent of Rs. 1,50,000 was exempt under section 5(1), was not challenged before the AAC, this challenge which involves investigation of facts cannot be entertained at this stage. There is, however, merit in the submission of the assessee's learned counsel, Shri Jain, that in view of the rulings of the Hon'ble Supreme Court in the cases cited by him, the Board's circulars, particularly where they are beneficial to the assessee, are binding on the revenue authorities. Viewed in this context, it cannot be disputed that the Board by Instruction No. 1070, dated 28-6-1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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