| Case ID |
14362ae8-c19c-4c26-90f5-98038b40c9f1 |
| Body |
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| Case Number |
Miscellaneous Civil Case No.708 of 1985 |
| Decision Date |
Mar 08, 1991 |
| Hearing Date |
|
| Decision |
The Tribunal held that the debt of Rs.77,425 claimed by Rakesh Kumar Agarwal against a fixed deposit of Rs.1 lakh in Dena Bank was deductible in computing his net wealth under section 2(m)(ii) of the Wealth Tax Act, 1957. The High Court affirmed that the deduction should be allowed only in proportion to the exempted value of the asset securing the debt. The case underscores the complexities involved in determining the deductibility of debts secured by partially exempted assets under the Wealth Tax Act. |
| Summary |
This case revolves around the interpretation of the Wealth Tax Act, 1957, specifically regarding the deductibility of debts owed by an assessee. Rakesh Kumar Agarwal, the assessee, had a fixed deposit and raised a loan against it. The core issue was whether the loan could be deducted from his net wealth, given that the asset was partially exempt from wealth tax. The Tribunal's decision emphasized the need to apply provisions of section 2(m)(ii) to determine the deductible portion of the debt. This case highlights the intricate balance between asset exemption and debt deductibility, crucial for taxpayers navigating wealth tax liabilities. Understanding these provisions is vital for legal practitioners and taxpayers alike, especially in the context of evolving taxation frameworks and asset valuations. |
| Court |
Madhya Pradesh High Court
|
| Entities Involved |
Not available
|
| Judges |
B.C. Verma,
R.D. Shukla
|
| Lawyers |
B.K. Rawat
|
| Petitioners |
RAKESH KUMAR AGARWAL
|
| Respondents |
COMMISSIONER OF WEALTH TAX
|
| Citations |
1993 SLD 299,
1993 PTD 552,
(1992) 198 ITR 256
|
| Other Citations |
CIT v. K.S. Vaidyanathan (1985) 153 ITR 11 (Mad.),
Apoorva Shantilal (HUF) v. CWT (1982) 135 ITR 182 (Guj.),
CIT v. M.N. Rajam (1982) 133 ITR 75 (Mad.),
CWT v. Narayandas, J. Hemani (1983) 143 ITR 87 (MP),
CWT v. Premnarayan Garg (1982) 134 ITR 315 (MP),
CWT v. Ch. Satish (1982) 133 ITR 834 (Mad.),
Rajkumar Singh Kasliwal v. CWT (1983) 143 ITR 597 (MP),
Srinivasan (T.V.) v. CWT (1980) 123 ITR 464 (Mad.)
|
| Laws Involved |
Wealth Tax Act, 1957
|
| Sections |
2(m)(ii),
27(1),
5(1)(xxvi),
4,
5
|