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Appeals filed by Revenue against deletion of addition representing building value on valuation date due to collateral security and lack of charge creation in respect of the property. Analysis: The appeals involved five assessment years from 1984-85 to 1988-89 consolidated due to common issues. The Revenue challenged the deletion of Rs. 17,00,000 addition representing the building value on the valuation date by the CIT(A), citing lack of direct nexus between debt secured from the bank and the asset owned by the assessee. The assessee's representative clarified that the property was shown as collateral security, emphasizing equitable mortgage registration. The Department argued for a close nexus between debt and asset for wealth-tax levy. The WTO found the property 'Pratap Building' owned by the assessee not reflected in net wealth due to liabilities exceeding its value. Loans were secured against various assets, with 'Pratap Building' offered as collateral. The CIT(A) deleted the additions, accepting the assessee's position. The assessee's representative highlighted equitable mortgage registration and the choice of the bank to realize loans against securities offered. The Tribunal analyzed the provisions of the Finance Act, 1983, regarding the computation of net wealth, considering debts secured in relation to assets. The property in question was offered as collateral security along with other assets, indicating a valid debt creation through equitable mortgage. The Tribunal emphasized the intention to create a security and the essence of mortgage types. Regarding the Registration Act, the Tribunal noted that the Wealth-tax Officer did not reject the assessee's stand based on registration provisions. The Transfer of Property Act's Section 59 exempted mortgage by title-deed from registration requirements. The Tribunal cited a Supreme Court case for conditions of mortgage by deposit of title-deed, emphasizing debt, deposit, and intention to create a charge. The Tribunal upheld the CIT(A)'s order for all years, stating a close nexus between debt and chargeable asset value. The deduction claimed for liabilities secured on chargeable assets was allowed. As there was no dispute on this matter, the appeals by Revenue were dismissed, affirming the CIT(A)'s decision.
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