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TMI Blog2013 (8) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... % of the creditors shown by the assessee." C.O. NO. 24/JP/2012 : 1. That on the facts, in totality of the circumstances and in law, the appeal filed by the revenue is not maintained and deserves to be dismissed in limine. 2. The Ld. CWT (A) erred in directing the A.O. to calculate the net wealth of the assessee at 2% of ₹ 25,80,64,752/- which is outstanding amount of the creditors, and erred in holding that the advance received against plots/lands etc. is not deductible as debt u/s 2(m) of Wealth Tax Act without appreciating the fact that the amount against advance against booking and amount received against JDA charges etc. was much more than the stock and the same was utilized in purchase of gold in order to hedge the escalatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of wealth filed for both the years, the assessee disclosed assets on the valuation date in respect of both the years as under :- A.Y. 2007-08 : Motor Car ₹ 80,94,455/- Jewellery/bullion ₹ 14,86,75,900/- A.Y. 2008-09 : Motor car ₹ 2,21,69,310/- Jewellery ₹ 19,18,78,125/- The assessee claimed deduction under section 2(m) of the Act for debts incurred in relation to the aforesaid assets available as on valuation date for each of the aforesaid years as the amounts that were received against plot booking and JDA charges were utilized in relation to the creation of the said assets. The Assessing Officer, however, disallowed the claim made under section 2(m) of the WT Act in both the years under appeal for the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008-09 as assessee's debt on the valuation date as such cannot be said to have incurred in relation to the assets held by him on that date. 5. On the other hand, assessee's counsel through written submissions as well as orally contends that the debt incurred by the appellant is not in dispute. The amount that are received are not taken as assessee's income. The same are liabilities outstanding in the Balance Sheet which reflect true and correct affairs and are part of record. It is also admitted fact that the amount of liability raised during the years under consideration and outstanding on the valuation dates have been utilized for the purpose of creation of assets. Since the investment in the assets as such have been made out of the aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that was utilized in acquiring the taxable asset. Accordingly, the advance received by the assessee from customers is liability for the assessee and if this liability was utilized in acquiring the taxable asset, the same constitute deductible debts for the purpose of calculating the net wealth of the assessee which is subsequently payable in goods subsequently. 6. Since the amount of debt is repayable in cash or kind, therefore, it is a debt and since it was utilized in purchase of taxable assets, therefore, deduction under section 2(m) of the WT Act is applicable. Reliance has been placed on the following judgments : (i) ITAT Jodhpur Bench in WTA No. 1/JU/2008 order dated 20.03.2009 in the case of The Lake Palace Hotels & Motels Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact that the advances received against plot booking and JDA charges have been utilized for acquisition of gold and car. This finding of fact has neither been assailed by the revenue nor shown to be perverse on facts. The same, therefore, attains finality. We also find and the record reveals that the amount of advances raised by the assessee against plot booking and JDA charges were repayable in cash or kind on the relevant valuation date and is a debt incurred by the assessee. The same are not shown to have been treated as income nor were assessed as assessee's income of the years under consideration in framing income tax assessment for respective years in appeal. Having utilized the amount of debt for creation of the assets i.e. motor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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