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Hyderabad Race Club Hyderabad vs Commissioner Of Wealth Tax A.P. on 11 December 1996

Supreme Court of India
Hyderabad Race Club, Hyderabad vs Commissioner Of Wealth Tax, A.P. on 11 December, 1996
Equivalent citations: [1997]223ITR703(SC), (1997)10SCC334, AIRONLINE 1996 SC 503, 1997 (10) SCC 334, (1997) 223 ITR 703, (1997) 139 CUR TAX REP 88, (1997) 138 TAXATION 747
Bench: B.P. Jeevan Reddy, K.T. Thomas
ORDER
1. The question which was referred for the opinion of the High Court under Section 27(1) of the Wealth-tax Act, 1957, is the following (see :

Whether, in the facts and circumstances of the case, the net wealth of the Hyderabad Race Club is exempt from,wealth-tax under Section 5(1)(i) of the Wealth-tax Act, 1957 ?
2. Section 5(1)(i) at the relevant time, and in so far as it is relevant for the present purposes reads as follows :

5. (1) Subject to the provisions of Sub-section (1A), the wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in ‘the net wealth of the assessee….
(i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India ;
(emphasis supplied)

3. The contention of the appellant that the property held by it is under a legal obligation for a public purpose of charitable nature has not been accepted by the High Court and we are not persuaded to take a different view. Indeed the question whether the Hyderabad Race Club was a chari table organisation was pronounced upon by a Full Bench of the Andhra Pradesh High Court in Hyderabad Race Club v.CIT It was held that it cannot claim to be a charitable organisation. We are told that the special leave petition preferred against the Full Bench decision has also been dismissed by this Court (see [1995] 212 ITR (St.) 375. In this view of the matter, we do not find any substance in this appeal. The appeal is dismissed accordingly. No costs.

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