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TMI Blog1984 (1) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 which was taken as loan for house construction by the assessee from the Government, should have been allowed as deduction out of taxable wealth of the assessee, though the total cost of the house which was exempt was only Rs. 30,000. 2. The assessee had taken a loan of Rs. 20,000 from the Government for construction of a house and the total cost of the house was Rs. 30,000, which too was exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act and finally relied on the cases of Spencer Co. Ltd. and Ishori Devi whereas learned departmental representative relied on a Tribunal decision dated 8-9-1983 in the case of WTO v. Champalal Saraogi [1984] 7 ITD 18 (Cal.), T. V. Srinivasan v. CWT [1980] 123 ITR 464 (Mad.) and Apoorva Shantilal (HUF) v. CWT [1982] 135 ITR 182 (Guj.), besides order of two lower authorities. 4. After taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (ii) of section 2(m), it would appear that once a loan is taken or debt is secured on the properties which are not liable to be charged under the Wealth-tax Act, the debt cannot be deducted." Finally, the learned Members in later part of para 4 observed as under: "... If a particular asset which is not chargeable to wealth-tax, has been secured in relation exempted to an asset, such a loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and came to the conclusion that the loan raised against insurance policy cannot be permitted to be deducted, since the LIC policy is exempt. This also came to confirm the Madras High Court decision in the case of T. V. Srinivasan, in which their Lordships held as under : "... (i) that on a proper reading of section 2(m)(ii) of the Wealth-tax Act, 1957, the assessee was not eligible for the ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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