ORIENT CLUB Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THIS reference made under s. 27(1) of the W.T. Act, 1957 (hereinafter referred to as 'the Act'), raises a question as to whether a members club is liable to assessment under the Act.

(2.) THE assessee is the Orient Club, Bombay, which was opened on May 1, 1900, and was started with a view 'to provided a first class club to which person of culture and position could be admitted irrespective of race, creed or politics on terms of social equality'. The rues and bye -laws of the club provide for different classes of membership such as, (1) permanent members, (2) life members, (3) temporary members and (4) honorary members. In order to obtain a membership in the club, fees have to be paid. A person can become a life members on payment of a lump sum of Rs. 2,000 and he is not to pay any further subscription. Permanent members have to pay an entrance fee of Rs. 1,000 and the necessary monthly subscription. No fees are payable by honorary members. Temporary members have also to pay fees. The affairs of the club are looked after by a managing committee consisting of a president and fourteen members elected annually at the annual general meeting. The are also trustees of the club and the number of trustees cannot be less than 3. The trustee are elected and can be removed by a vote of majority of not less than two -thirds of the members present at the general meeting of the members of the club and the vote is to be taken by ballot. So far as the property of the club is concerned, if vests in the trustees and cl. 34(d) of the rules of the club reads as follow :

(3.) WE are in this reference concerned with the assessment years 1962 -63 and 1963 -64, the relevant valuation dates being December 31, 1961, and December 31, 1962. In the proceedings for assessment under the W.T. Act, the contention of the assessee -club before the WTO was that the trustees of the property of the club were not owners of the property or assets of the club and the club was not liable to be assessed to wealth -tax. The WTO, however, took the view that an 'individual' in s. 3 of the Act included a group of persons and that joint trustees were liable to wealth -tax in the statue of an 'individual'. The WTO took the view that the property of the club vested in the trustees who, in any legal proceedings. Were deemed sufficient to represent the club.