COMMISSIONER OF WEALTH TAX Vs. HYDERABAD RACE CLUB

JUDGEMENT

(1.) THE question that is referred for consideration under Section 256(1) of the I.T. Act, 1961, is:

(2.) THE assessments in question relate to the periods 1959-60 to 1962-63 and 1964-65 to 1970-71, during which period, the Hyderabad Race Club (for short " the club "), the assessee herein, was a society registered under the Societies Registration Act. THE assessee claimed exemption from payment of wealth-tax under Section 5(1 )(i) of the Act, which reads as follows :

(3.) SECTION 3 of the Act, which is the charging section, imposes the liability of wealth-tax in respect of the net wealth of an individual, HUF and company at the specified rates. The net wealth would include assets mentioned in SECTION 2 of the Act. Thus, all the wealth held by an individual, HUF and company is liable to tax subject to the exemptions contained in SECTION 5(1)(i). Once the wealth-tax is attracted to the assets held by an assessee, the burden lies on such assessee to establish that he comes within the exceptions laid down under SECTION 5. Primarily, all the assets of the assessee would be included in the wealth of the assessee for purposes of assessment to tax unless any such asset is excluded under the exemption provided under SECTION 5 of the Act. In v, the Supreme Court declared (per Headnote) :