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TMI Blog2018 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ts does not arise in this case as rightly held by the ld. CIT(A). We find no fault if the assessee has borrowed the funds for acquiring capital assets, which is exactly, nothing but leased vehicles. However, the assessee has not brought on record and cogent evidences as to whether the borrowed funds were utilized for leased vehicles. From the above, the stated fact is that the assessee has, initially, acquired leased vehicles and thereafter borrowed funds from Banks and utilized. To accept the above contention of the assessee, the assessee is required to file complete details of acquisition of leased vehicles, utilization of borrowed funds for both the assessment years before the Assessing Officer and accordingly, the Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of appeal papers, etc. and its filing, the delay was occurred. Thus, the ld. Counsel has submitted that the delay was neither wilful nor wanton and prayed to condone the delay. We have gone through affidavit filed by the assessee and of the opinion that the assessee was prevented by sufficient cause. The ld. DR could not seriously object to condone the delay. Accordingly, we condone the delay of 25 days in filing the appeal and admit the same for hearing. 3. Brief facts of the case are that the assessee filed its return of wealth for the assessment year 2001-02 declaring net wealth of ₹.1,38,60,441/- on 30.10.2001 and for the assessment year 2002-03 declaring net wealth of ₹.1,05,28,568/- on 29.10.2002. The Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 2(m) of the Act defining Net Wealth , only the debts owed by the assessee on the valuation date incurred in relation to the said assets are deductible. The assessee has not shown that the amount deducted as debts are incurred in relation to the assets included in the gross wealth. Since the provisions of Wealth Tax Act do not permit a proportionate deduction in the ratio of the debts to total funds of the company, the Assessing Officer issued a notice under section 17 of the Act dated 31.03.2008, which was served on the assessee on 03.04.2008. The assessee, vide its letter dated 10.04.2008 requested that the original return filed be treated as a return filed in response to notice under section 17 of the Act. Subsequently, a notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that the loan has been taken only to meet the working capital requirements of the assessee company and not to purchase vehicles. Only debts which have been incurred for the purchase of taxable asset are to be allowed as a deduction. Since the debts have been incurred after the purchase of the taxable assets and moreover, the assets have been purchased without utilising borrowed funds, the debts claimed as deduction was disallowed for both the assessment years. 6. The assessee carried the matter in appeal before the ld. CIT(A). After considering the facts of the case as well as submissions of the assessee, the ld. CIT(A) dismissed the appeals by holding that the debts were not incurred for acquiring the assets. 7. On being aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the valuation date incurred in relation to the said assets are deductible. 9. So far as adoption of proportionate basis for determination of the debts utilized for acquiring taxable assets is concerned, the same may be accepted, where it is not possible to calculate the amount of debt that was utilized for the purposes of acquiring each of the assets. Admittedly, the assessee is engaged in hire purchase and leasing the vehicles. Proportionate basis for determination of the debt can be adopted if multiple assets were brought under wealth tax. In the computation of wealth, the assessee has declared value of own vehicles as well as value of leased vehicles and no other assets exist or compounded with any other assets so as to find diff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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