Law:

Section:

Section 2(m) of the Wealth-tax Act, 1957 - Net wealth - Debt owed - One or assets included in net wealth of assessee was a house property valued at Rs. 5 lakhs - A debt of Rs. 62,500 was incurred on repairs and improvements of aforesaid house - Whether assessee was entitled to exemption of 4/5th of aforesaid debt - Held, yes FACTS One of the assets included in the wealth of the assessee was a house property. It was valued at Rs. 5 lakhs. A debt of Rs. 62,500 was incurred on repairs and improvements to the house. The WTO did not allow any deduction on account of aforesaid debt. However, on second appeal the Tribunal held that 4/5th of the aforesaid debt was deductible under section 2(m). On reference: HELD On the perusal of the relevant provisions in the instant case what the Tribunal had done was perfectly in accordance with the provisions of the Act. Therefore, the Tribunal had rightly allowed the exemption to the assessee. Vikram Gulati for the Respondent. JUDGMENT Reddy, CJ. -The question referred under section 27(1) of the Wealth-lax Act, 1957, ('the Act') is : "Whether, on the facts and in the circumstances of the case, the debt relating to the taxable wealth after allowing exemption under section 5(1)(iv) of the Act was allowable to the assessee?" 2. One of the assets included in the wealth of the assessee was a house properly. It was valued at Rs. 5,00,000. It was pointed out that a sum of Rs. 62,500 was…

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