BENGALURU: In a setback to the Mysuru
royal family members, the
Karnataka high court on Thursday upheld the imposition of wealth tax on 28 acres of land known as ‘Bangalore Palace and its appurtenant lands’ for assessment years 1999-2000 to 2004-05.
The assessing authority had fixed Rs 183.3 crore as wealth tax for the 28 acres of land at the rate of Rs 1,500 per sqft based on the then prevailing guidance value set by the state government.
The bench said the Income Tax Appellate Tribunal (ITAT) was not justified in holding that 28 acres located within the corporation limits of Bengaluru city does not fall within the definition of ‘assets’ in section 2(ea)(b) of the Wealth Tax Act-1957 and no wealth tax is chargeable on the land.
HC: Question of ownership subject to SC decision
We hold that wealth tax would be chargeable for these assessment years as the urban lands belonged to the assessees on the respective valuation dates from 1999-2000 to 2004-05,” a division bench observed, while allowing the wealth tax appeal filed by the income tax department.
The bench said though the question of ownership is subject to the Supreme Court decision on the validity of the
Bangalore Palace (Acquisition and Transfer) Act 1996, they are liable to pay wealth tax for the assessment years as they were in possession of the land on the said valuation dates. The appeal against the 1996 Act that sought to acquire 472 acres of the Palace property is pending before the SC.
The sisters of late Srikantadatta Narasimharaja Wadiyar had contended that the valuation cannot exceed Rs 11 crore as fixed by the 1996 Act.
(Picture used for representational purpose)
