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TMI Blog1996 (9) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... common issue in appeals relates to claim of liabilities. As facts are identical, we will discuss the case of Shri D.P. Dhawan and apply our order to both the cases. Shri Dhawan returned net wealth of Rs. 24,65,300 after claiming deduction of Rs. 7,77,189 towards liabilities from the gross value of assets disclosed at Rs. 32,42,473. The wealth returned also included value of residential house under rule 1BB disclosed at Rs. 42,424 under rule 1BB of the Wealth-tax Rules. 3. The Wealth-tax Officer did not allow liabilities of Rs. 6,71,827 claimed as payable to bank and took value of house at ' nil ' with the following observations : " The overdrafts from banks were taken for the purchase of house. The assessee has claimed rebate in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no justification for apportionment of liabilities. He accordingly allowed relief of Rs. 6,71,827 to the assessee. The Revenue has come up in appeal. 5. We have heard both the parties. The learned D.R. submitted that the house has been treated as exempt and its value has been taken at ' nil '. In above circumstances, no liability in respect of loan utilised for purchase of house could be allowed. The D.R. accordingly supported order of the Assessing Officer. Shri G.N. Gupta, learned counsel for the assessee, submitted that out of total loan from the bank, a part was utilised for purchase of shares and other assets disclosed in the wealth. The assessee as per return did not claim exemption of value of house but had claimed exemption un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h showed that part of liabilities were utilised for acquiring assets other than the house. In spite of above opportunity, the assessee could not refer to any material on record. There is no justification to take fresh material into account at this stage of proceedings. We, therefore, decline to admit fresh material and would go by the finding of Assessing Officer that debt of Rs. 6,71,827 was claimed in respect of house the value of which was shown under rule 1BB at Rs. 42,424. 7. The above facts give rise to following two questions : 1. If the assessee is entitled to exemption of more than one asset and exercises above option in respect of a particular asset, can the Assessing Officer change such option and treat an asset as exempt to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must fall within the exclusionary part and there is nothing in the exclusionary part which suggests that the debt must either be relatable to any asset at all or if it is relatable to any asset, such asset must be included in the books of account or the balance-sheet of the assessee before a deduction in respect thereof is allowed. If such were the intention of the Legislature, the exclusionary part of section 2(m) would have made a specific provision in that behalf by adding an appropriate sub-clause therein." 8. The exclusionary clauses referred to by their Lordships are reproduced at page 557 of report as under : (i) debts which under section 6 are not to be taken into account ; (ii) debts which are secured on or which have been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption on the assessee. The other reasoning given by him that against value of Rs. 42,424 liability of Rs. 6,71,827 cannot be allowed, is equally untenable. As per sub-clause referred to above, only debts which are secured or incurred in relation to any property not chargeable under this Act are to be excluded. The mere fact that the value of returned is less than the liability claimed is no ground to disallow the liability. The market value of the house as on the valuation date might have been much more. But under the beneficial provision of rule 1BB read with section 7(4), a lesser value was returned. The Assessing Officer could not deny benefit of rule 1BB because he was to allow higher liabilities. In the same manner, he could not d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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