Madras H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the loans secured by the assessee on the house property at Cross-cut Road, Coimbatore, should be allowed in full even though a sum of Rs. 1,00,000 was allowed as exemption under s. 5(1)(iv) of the WT Act and a sum of Rs. 26,229 alone was included in the net wealth of the assessee as the value of the house property referred to above?

Counsel Appeared

N. V. Balasubramanian, for the Revenue : Meenakshisundaram for C. V. Mahalingam, for the Assessee

RATNAM, J.:

Under s. 27(1) of the WT Act, 1957, at the instance of the Revenue, the following question of law has been referred for the opinion of this Court:

“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the loans secured by the assessee on the house property at Cross-cut Road, Coimbatore, should be allowed in full even though a sum of Rs. 1,00,000 was allowed as exemption under s. 5(1)(iv) of the WT Act and a sum of Rs. 26,229 alone was included in the net wealth of the assessee as the value of the house property referred to above?”

We find that the question referred has already been dealt with in the decision of a Full Bench of this Court in CIT vs. K. S. Vaidyanathan (1985) 153 ITR 11. The present case will fall under category (ii), in that the Tribunal has allowed deduction of the entire debt as a whole as against the allowance of a part in proportion to the tax exempted value of the secured assessment. Consequently, in view of the decision of the Full Bench referred to earlier, the questions referred to us have to be answered in the negative and in favour of the Revenue. The Tribunal is directed to work out the proportion on the facts of this case. There will be no order as to costs in this reference.

[Citation :181 ITR 56]