Hyderabad Race Club, Hyderabad vs Commissioner of Wealth Tax, A.P.

The question which was referred for the opinion of the High Court u/s 27(1) of the Wealth-tax Act, 1957, is the following (see Commissioner of Wealth-tax Vs. Hyderabad Race Club,

Whether, in the facts and circumstances of the case, the net wealth of the Hyderabad Race Club is exempt from,wealth-tax u/s 5(1)(i) of the Wealth-tax Act, 1957 ?

Section 5(1)(i) at the relevant time, and in so far as it is relevant for the present purposes reads as follows :

(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)

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 Vs. Commissioner of Income Tax, It was held that it cannot claim to be a charitable organisation. We are told that the SLP preferred against the Full Bench decision has also been dismissed by this Court (see [1995] 212 ITR 375. In this view of the matter, we do not find any substance in this appeal. The appeal is dismissed accordingly. No costs.