Law: Wealth Tax Act, 1957

Section: 5(1)(xvia),2(m)(ii)

Wealth tax--- ---- Net wealth---Exemption---Loan obtained by assessee against pledge of gold bonds---Loan is obtained on security of property not chargeable to wealth tax at all---Not deductible in computing net wealth. The loan obtained by an assessee against the pledge of gold bonds is not deductible in computing his net wealth under section 2(m)(ii) of the Wealth tax Act, 1957, because the loan is obtained on the security of property which is not chargeable to wealth tax at all. C.W.T. v. Vasantkumar Govindji Kotak (1990) 186 ITR 91 (Bom.) fol. JUDGMENT T.D. SUGLA, J.---The question of law referred to this Court by the Tribunal at the instance of the assessee in this case is: "Whether, on the facts and in the circumstances of the case; the loan obtained by the assessee against the pledge of gold bonds was deductible in arriving at the net wealth of the assessee for the purpose of the Wealth-tax Act? It is common ground that the loan obtained by the assessee in this case is on the security of National Defence Gold Bonds which are wholly exempt under section 5(1)(xvia) of the Wealth Tax Act. The question raised herein is, thus, a question similar to the question where a loan was obtained on the security of life insurance policies. For the reasons given in our judgment of this date in Wealth Tax Reference No. 113 of…

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