Commissioner of Wealth-tax vs A.R. Balakrishnan

Ratnam, J.—u/s 27(1) of the Wealth-tax Act, 1957, at the instance of the Revenue, the following question of law has been referred for the

opinion of this court :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the loans secured by the

assessee on the house property at Cross-cut Road, Coimbatore, should be allowed in full even though a sum of Rs. 1,00,000 was allowed as

exemption u/s 5(1)(iv) of the Wealth-tax Act and a sum of Rs. 26,229 alone was included in the net wealth of the assessee as the value of the

house property referred to above ?

We find that the question referred has already been dealt with in the decision of a Full Bench of this court in Premier Electro Mechanical

Fabricators Vs. The State of Tamil Nadu, . The present case will fall under category (ii), in that the Tribunal has allowed deduction of the entire

debt as a whole as against the allowance of a part in proportion to the tax exempted value of the secured assessment. Consequently, in view of the

decision of the Full Bench referred to earlier, the questions referred to us have to be answered in the negative and in favour of the Revenue. The

Tribunal is directed to work out the proportion on the facts of this case. There will be no order as to costs in this reference.