COMMISSIONER OF WEALTH TAX Vs. RAMA VARMA CLUB

JUDGEMENT

(1.) THESE references are at the instance of the Revenue under Section 27(1) of the Wealth-tax Act, 1957. They relate to the assessment years 1981-82 to 1983-84. The common question referred by the Income-tax Appellate Tribunal, Cochin Bench, for the opinion of this court is as follows :

(2.) THE facts in brief are as follows : THE assessee--Rama Varma Club-was founded as early as in the year 1897, in the former native State of Cochin during the regime of Raja Rama Varma (1895 to 1914). It was the first recreation club in Cochin. Located in the very heart of the present city of Cochin facing the Durbar Hall ground, the club provides facilities for games, such as, tennis, badminton, billiards, cards, chess, ping-pong, etc.

(3.) THE question whether a members' club like the assessee is liable to be taxed under the Wealth-tax Act, 1957, treating it as an "individual" under Section 3 before the introduction of Section 21AA has been finally answered by this court in CWT v. Mulam Club [1991] 191 ITR 370. This court took the view that a members' club which is a voluntary association of persons joining together in accordance with the rules and bye-laws of the club for enjoyment of one another's company and other facilities or for some other purposes, is not liable to be assessed as an "individual" under Section 3 of the Wealth-tax Act, 1957. While coming to the above conclusion, this court followed the decisions of the High Courts of Bombay, Gujarat and Calcutta in Orient Club v. CWT [1982] 136 ITR 697 (Bom), Willingdon Sports Club v. C. B. Patil [1982] 137 ITR 83 (Bom), Bombay Cricket Association v. B. R. Sonkar, First WTO [1987] 166 ITR 356 (Bom), Orient Club v. WTO [1980] 123 ITR 395 (Guj) and Royal Calcutta Turf Club v. WTO [1984] 148 ITR 790 (Cal). Two decisions of the Madras High Court in Coimbatore Club v. WTO [1985] 153 ITR 172 (Mad) and State Bank of India Officers' Association v. CWT [1986] 158 ITR 23 (Mad) were dissented from.