BENGALURU: The Karnataka High Court on Thursday upheld the contention of the Income Tax Department that the land in custody of Mysuru royal family at Palace Grounds in the city were chargeable with wealth tax.
A division bench of Justice Vineet Kothari and Justice S Sujatha upheld the contention while allowing the appeal filed by the IT Department. The IT Department filed an appeal against the I-T Appellate Tribunal which in 2014 justified the contention of royal family members that 28 acres of ‘urban land’ comes under the ambit of the exemption clause of Section 2(ea) of the Wealth Tax Act, 1957. Hence, the IT Department moved court.
The levy of wealth tax was discontinued from the assessment year 2016-17, as amended by the Finance Bill of 2015. The court said although there was bar on permanent construction on the land, constructions were done from time to time on the land. Hence the urban land could not fall in the exclusion clause.