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TMI Blog1995 (11) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowed in terms of section 2(m)(ii) of the Wealth-tax Act, 1957 ?" The brief facts for disposal of this reference are as under : W.T.A. No. 390 of 1983 for the assessment year 1976-77, was by the Revenue and other appeals were filed by the assessee, i.e., W.T.A. Nos. 189 of 1983, 190 of 1983 and 191 of 1983. All the assessees are co-sharers in the business called Bhopal Stud and Agricultural Farm. In the wealth-tax assessment of the assessees, it was claimed that the said agricultural farm had liabilities amounting to Rs. 1,86,300. In calculating the value of the shares of each of the assessees, the Wealth-tax Officer allowed liabilities to the extent of Rs. 50,300 only and thus increased the value of the shares of each of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curity of fixed deposits should be allowed or not. We are not concerned with the question of reduction of liability pertaining to Bhopal Stud and Agricultural Farm. We are concerned with the second question of disallowance of loans raised on fixed deposits. The Tribunal held that the loans raised by each of the assessees are comparatively smaller. Under section 5 of the Act, exemption is in respect of deposits in banks not exceeding Rs. 1,50,000. It is submitted that from the facts, each of the assessees owns a larger amount on fixed deposit and, therefore, it was held, relying on a decision in CIT v. M. N. Rajam [1982] 133 ITR 75 (Mad) that it cannot be said that the loans in question related to exemption assets. The liability raised again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 28, 1977, and the Madras decision related to the assessment years 1971-72, 1972-73 and 1973-74. So far as the decision of this court is concerned, it related to the assessment year 1977-78. Be that as it may, the fact remains that this circular has a relevance in the matter and it is binding on all the subordinate authorities, but somehow it appears that the circular has been missed by all the authorities below as also by the Tribunal. The circular reads as under : " The Board have also examined the question as to how the deduction in respect of debts which are secured on, or have been incurred in relation to, any property which is partly exempt under section 5(1) is to be allowed. The Board are of the view that in the absence of any cl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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