2018 (10) TMI 1192 - HC - Wealth-tax

Treatment to the Royal Buggy as work of art and exempted under Section 5(i)(xii) of the Wealth Tax Act, 1957 - Tribunal held the issue in favour of the assessee as relying on Shantadevi P. Gaekwad Vs. Wealth-tax Officer 2017 (6) TMI 687 - GUJARAT HIGH COURT - Revenue drew our attention to certain legislative changes, which took place in the said Act and that Clause (xii) of Sub-Section (1) of Section 5 stood deleted with effect from 01.04.1993 by virtue of Act 18 of 1992. Held that - The assessee appeared on caveat and consented to final disposal of the Tax Appeals at this very stage. He candidly agreed to the contentions raised by the Counsel for the Revenue. It does not appear that legislative changes were brought to the notice of the Income Tax Appellate Tribunal and resultantly, the Tribunal fell in error in applying the ratio of judgment of this Court, which was rendered in the backdrop of the Assessment Year 1972-73 when Clause (xii) of Sub-Section (1) of Section 5 of the Act was still in force. As noted with effect from 01.04.1993, this Section came to be dropped. We are concerned with the Assessment Year 2004-05 and onwards. In the result, the impugned common judgment of the Tribunal rendered in favour of assessee in the Cross Appeals for the respective Assessment Years is set aside. The judgment of the Revenue authority is restored. - Decided against assessee.

Summary

Issues:
1. Interpretation of the exemption under Section 5(i)(xii) of the Wealth Tax Act, 1957 for a royal Buggy containing gold.
2. Impact of legislative changes on the interpretation of the exemption.

Analysis:
1. The Appeals by the Revenue challenged the Tribunal's judgment regarding the classification of a royal Buggy as a 'work of art' exempted under Section 5(i)(xii) of the Wealth Tax Act, 1957. The Buggy, owned by the late Smt. Maharani Shantadevi Gaekwad, contained substantial gold and was intended for ceremonial use. The Assessing Officer taxed the gold content for wealth tax, contrary to the assessee's claim of exemption under Section 5(i)(xii). The Tribunal ruled in favor of the assessee, citing a previous judgment in the same case where the Court allowed the appeal based on the Buggy being considered a work of art, despite also falling under a different clause.

2. The Revenue argued that legislative changes had deleted Clause (xii) of Sub-Section (1) of Section 5 from the Act, effective from 01.04.1993. Therefore, the Tribunal erred in applying the previous judgment to grant the assessee exemption. The assessee's advocate agreed to the Revenue's contentions, acknowledging that the Tribunal overlooked the legislative changes. As a result, the Tribunal's decision was overturned, and the Revenue's authority was upheld for the Assessment Years in question. All Tax Appeals were allowed in favor of the Revenue, and the matter was disposed of accordingly.