AMATEUR RIDERS CLUB Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS is the assessee's reference. It relates to the assessee's wealth tax assessments for the asst. yrs. 1962 63 to 1970 71. The questions of law referred to this Court by the Tribunal are:

(2.) SHRI Mehta, learned counsel for the assessee, stated that the issue involved herein is covered by two judgments of our Court in the cases of Orient Club vs. CWT (1982) 136 ITR 697 and Willingdon Sports Club vs. C. B. Patil, Third Addl. WTO (1982) 137 ITR 83 in favour of the assessee. Shri Jetley, learned counsel for the Revenue, on the other hand, stated that it was not so and the issue involved herein required reconsideration. The Supreme Court, it was pointed out, held in the case of CWT vs. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust (1977) 108 ITR 555, at page 590, that the trustees of a trust were included in the expression 'individual' as used in S. 3 of the WT Act. The Supreme Court, in that case, had relied on its earlier decision in the case of Trustees of Gordhandas Govindram Family Charity Trust vs. CWT (1973) 88 ITR 47. Following the Supreme Court decision in CWT vs. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust (supra), the Gauhati High Court, in the case of CWT vs. B. C. Gupta and Sons Ltd. (1990) 182 ITR 240, he pointed out, held that the trustees, in the case of deities, were assessable under section, 21 of the WT Act. The Madras High Court was also stated to have held in the case of Coimbatore Club vs. WTO (1985) 153 ITR 172, that the club was an assessable entity under the WT Act. The submission of Shri Jetley, thus, is that the question involved herein requires reconsideration as the Supreme Court decision in CWT vs. Trustees of H. E. H. Nizams' Family (Remainder Wealth) Trust (supra), was not noticed in our Court's aforesaid two decisions. We have gone through the decisions of the Supreme Court in Trustees of Gordhandas Govindram Family Charity Trust vs. CWT (supra) and CWT vs. Trustees of H. E. H. Nizams' Family (Remainder Wealth) Trust (supra) carefully. Both these cases are of trusts where the legal ownership of the trust funds vested in the trustees. The case of the club is different and we do not think that the ratio of the aforesaid two Supreme Court decisions wherein the question whether the trustees could be assessed under the WT Act was considered, have any bearing on the question involved before us. As regards the Gauhati High Court decision, there is hardly any discussion on the subject. Moreover, that was also a case of deities and, for the reasons stated by us above, we do not think that the Supreme Court decision in CWT vs. Trustees of H. E. H. Nizams' Family (Remainder Wealth) Trust (supra) can be taken to be an authority for the proposition that the club, like the one before us, is also an assessable entity under the WT Act. It is true that the Madras High Court has independently discussed and come to the conclusion that the club like the one in the present case is an assessable entity under the WT Act. However, as fairly conceded by Shri Jetley himself, the Madras High Court has not followed the Gujarat High Court decision in the case of Orient Club vs. WTO (supra) and the judgments of our Court in Orient Club vs. CWT (supra) and Willingdon Sports Club vs. C. B. Patil, Third Addl. WTO (supra) which are binding on us. The mere fact that the Madras High Court has taken a different view is no ground for our not following those judgments.

(3.) THE assessee club is not an assessable entity under the WT Act and cannot, therefore, be taxed as such. There will be no order as to costs.