Case Law Details

Case Name : Maharao Bhim Singh of Kota Vs Commissioner of Income-tax (supreme Court of India)
Appeal Number : Civil Appeal No. 2812 of 2015
Date of Judgement/Order : 26/03/2014
Related Assessment Year :
CA Hiren Bhandari

Income Tax exemption on let out portion of palace as it would be deemed to be in occupation of Ruler under sec. 10(19A)

Where Ruler continues to occupy palace, whether by actually utilizing it or by keeping it vacant, it shall be, for purpose of section 10(19A), deemed to be in his occupation, and he will also be entitled to exemption under section 10(19A) in respect of annual value of Part of palace, possession of which he has parted with in favour of tenants.

Hon’ble Supreme Court in case of Maharao Bhim Singh of Kota Thr. Maharao Brij Raj Singh, Kota V/s Commissioner of Income Tax, Rajasthan -II, Jaipur has held that a Palace in occupation of Ruler can’t be split up as per interpretation U/sec 10(19A) of I.T.Act,1961, exemption is allowed in case of part rented portion of a palace. Hon’ble Supreme Court has considered opinion, the reasoning and the conclusion arrived atby  the  High Court in  the impugned order including the view  taken by  the Rajasthan High Court in  Maharaval Lakshman singh’s case (supra) does not lay   down  correct  principle  of  law   whereas the  view taken   by     the    M.P.   High   Court    in     cases   of Bharatchandra Bhanjdeo (supra),  Commissioner  of Income-Tax vs. Bharatchandra Bhanjdev (1989)176ITR   380  (MP)   and      H.H.  Maharao  Bhim  Singhji (supra) lays down correct principle of law.

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One Comment

  1. B.V.Subrahmanyam says:

    If one rents out a portion of his house, and continues to occupy the other portion, is he entitled for income tax exemption on the income from the let out portion of the property, as per the supreme court
    judgement cited here? If so, one can get such exemptions on let out portion for Paying guests?

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