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TMI Blog1982 (7) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to Rs. 75,000. The Asst. Controller deducted a sum of Rs. 1 lakh from the value of this asset being the exemption available u/s 33(1)(n) and out of the balance of Rs. 1 lakh allowed only proportionate amount of the mortgage debt of Rs. 37,500. On appeal, the Appellate Controller directed the deduction of the mortgage debt first from the value of the asset and granted exemption u/s 33(1)(n) out of the balance, i.e., the liability of Rs. 75,000 was deducted out of the value of the asset determined at Rs. 2 lakhs and from the net value of the asset of Rs. 1,25,000 exemption of Rs. 1 lakh was given u/s 33(1)(n). 3. The revenue has taken exception to this decision of the Appellate Controller and it was submitted that the proviso to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a restriction confining the deduction of certain debts from the value of a particular asset which is charged with that debt. It would follow that what is to be taken as the value of the asset is the net value which is chargeable to estate duty and from the net value the deductions u/s 33 in respect of exemptions have to be given. 4. Even assuming for the purpose of discussion that the proviso allows the deduction of the debt in respect of the value of the property liable to estate duty only, the contention of the revenue that the deduction should be proportionately reduced to the value liable to estate duty does not follow. In contrast to the Wealth-tax Act where u/s 5(1) the asset exempted from wealth-tax does not form part of the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has in the case of CIT vs. M.N. Rajam (1982) 31 CTR (Mad) 85 : (9182) 133 ITR 75(Mad) pointed out that a house property can be brought within the charge to the extent that its value exceeds Rs. 1 lakh and therefore it could not be asserted that it is a property in respect of which wealth-tax is not chargeable and consequently the entire loan outstanding in respect of that property could be deducted. A perusal of the form prescribed under the ED Act reveals that the revenue has understood the scope of the proviso to s.44 in the same light and it is specifically provided that the debts which are to be listed in Sch. 3 are to be deducted from the value of the gross immovable property in account No. 1 to arrive at the value of the net immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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