Principal Commissioner Of Income Tax Vadodara 1 v. Estate Of Late Shrimant Maharani Shantadevi Gaekwad======================================Appearance

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 569 of 2018 With R/TAX APPEAL NO. 553 of 2018With R/TAX APPEAL NO. 560 of 2018With R/TAX APPEAL NO. 567 of 2018With R/TAX APPEAL NO. 570 of 2018With R/TAX APPEAL NO. 571 of 2018 ======================================PRINCIPAL COMMISSIONER OF INCOME TAX VADODARA 1 Versus ESTATE OF LATE SHRIMANT MAHARANI SHANTADEVI GAEKWAD======================================Appearance: MR.VARUN K.PATEL(3802) for the APPELLANT(s) No. 1MR MANISH J SHAH(1320) for the RESPONDENT(s) No. 1====================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHIandHONOURABLE MR.JUSTICE UMESH TRIVEDI Date : 22/10/2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1.All these Appeals are filed by the Revenue challenging the judgment of the Income Tax Appellate Tribunal. 2.Since the issue is common, so is the factual background, we may record the facts from Tax Appeal No.569 of 2018. In this Appeal, Revenue has suggested the following question for our consideration: “Whether in the facts and circumstances of the case, the learned Tribunal has erred in law and on facts in treating the Royal Buggy as ‘work of art’ and exempted under Section 5(i)(xii) of the Wealth Tax Act, 1957 without appreciating that it contained gold and was intended for personal use and therefore, was not exempted from Wealth Tax as per first proviso to Clause (viii) of sub-section (1) of Section 5 of the said Act?” 3.This question arises in following background. The respondent – assessee represents the estate of late Smt. Maharani Shantadevi Gaekwad, who belong to the erstwhile royal family of the State of Baroda. The assessee owned a horse chariot known as Buggy. This Buggy was made specially for the use of ceremonial occasions. It has extensive art work. The Buggy had substantial gold contents. According to the assessee, Buggy was a work of art and was therefore exempted from wealth tax in terms of Section 5(1) (xii) of the Wealth Tax Act, 1957 (“the Act” for short). The Assessing Officer however discarded such defence of the assessee and taxed the same for the purpose of wealth tax on the basis of the value of the gold estimated and added such amount to the total wealth of the assessee. In the present Tax Appeal, we are concerned with the Assessment Year 2005 – 06. The remaining Tax Appeals relate to the Assessment Years 2006 – 07 and onwards. 4.By the impugned judgment, the Tribunal held the issue in favour of the assessee relying on the judgment of this Court in case of this very assessee in which appeal was allowed. The judgment is reported in Shantadevi P. Gaekwad Vs. Wealth-tax Officer [2017] 82 taxmann.com 460 (Gujarat). The Court held that once it was held that the article would fall under Clause (xii) of Sub- Section (1 )of Section 5 of the Act merely because incidentally it also falls under Clause (viii) would not destroy its very essence of being an article of work of art. 5.Learned advocate for the appellant – Revenue drew our attention to certain legislative changes, which took place in the said Act. He pointed out 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. Consequently, the Tribunal was not correct in granting benefit to the assessee by placing reliance on the judgment of this Court in the case of Shantadevi P. Gaekwad (Supra). 460 (Gujarat). The Court held that once it was held that the article would fall under Clause (xii) of Sub- Section (1 )of Section 5 of the Act merely because incidentally it also falls under Clause (viii) would not destroy its very essence of being an article of work of art. 5.Learned advocate for the appellant – Revenue drew our attention to certain legislative changes, which took place in the said Act. He pointed out 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. Consequently, the Tribunal was not correct in granting benefit to the assessee by placing reliance on the judgment of this Court in the case of Shantadevi P. Gaekwad (Supra). 6.Learned advocate Shri Manish Shah for 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. 7.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. All Tax Appeals are allowed and disposed of accordingly. (AKIL KURESHI, J.) (UMESH TRIVEDI, J.) siji