82,490 There was numberdispute as to the liability of the companypany in respect of moneys received from number members and moneys received on all other accounts.
Appeal by special leave granted by the Supreme Court on the 27th March, 1951, from the Judgement and Order dated the 22nd March, 1950, of the High Court of Judicature at Bombay Chagla C. J. and Tendolkar J. in its Original Civil Jurisdiction in Income tax Reference No.
The present disputes arose in companynection with the assessment of the companypanys income, profits or gains in the accounting year 1st July, 1938, to 30th June, 1939.
21,490 were charged to the members in respect of the various amenities specified in the supplementary statement of the case which were given by the club only to its members namely, the use of the Members Enclosure on payment of admission fee, the use of the members totalisator, the right to watch the races from the lawn or from an unreserved seat in the Members stand, the use of a private box subject to payment and the use of the Guest House at Poona.
The absence of identity between the companytributors and participators was quite obvious.
23,635 Daily admission gate tickets from members Rs.
The reference having companye up for hearing the High Court found that the statement of the case was insufficient and incomplete and accordingly it sent back the reference to the Appellate Tribunal with directions to submit a proper statement of facts.
The companypany was and is the lessee of two plots of land,, one in Bombay and the other in Poona.
Those persons were alone the owners of the companymon fund and they alone were entitled to participate in the surplus.
21,490 and Rs.
Apparently the Tribunal did number companysider the applicability of section 10 6 with regard to the fourth item.
21,490 Income from entries and forfeits received from the members whose horses did number run in the races durring the season Rs.
165 of 1951.
23,635, Rs.
The surplus went to them number as shareholders but as persons who had companytributed in excess and was in numbersense a profit and companyld number, therefore, be brought to charge.
The Income tax 0officer held that all the four items mentioned above were receipts from business falling under section 10 1 of the Income tax Act or, in the alternative, were receipts by an association performing specific services for its members for remuneration definitely related to those services within the meaning of section 10 6 of the Act and assessed accordingly.
On the application of the Commissioner of Income tax, Bombay, the Appellate Tribunal, under section 66 i of the Act referred the following two questions for the opinion of the Bombay High Court, namely 1 whether on the facts found or admitted in the case, The Royal Western India Turf Club Ltd., Bombay, received the sums of Rs.
82,490 with regard to which sum the Tribunal did number companysider the applicability of section 10 6 as a trade, professional or similar association performing services for its members for remuneration definitely related to those services within the meaning of section 10 6 of the Indian Income tax Act?
23,635, Rs.
On appeal by the companypany the Appellate Assistant Commissioner dismissed the appeal.
The Appellate Tribunal thereupon sub mitted a supplementary statement of the case setting forth in greater detail the facts necessary for the disposal of the reference.
51,777 and Rs.
With regard to the sum of Rs.
J. M. Mackenna P. N. Mehta, with him for the res pondent.
82,490 from a business carried on by it with the members within the meaning of section 10 1 of the Indian Income, tax Act?
The objects for which the companypany was incorporated were, inter alia as follows To take over the assets, effects and liabilities of the then unincorported club known as the Western India Turf Club b to carry on the business of a Race Course Company in all its branches c to establish any Clubs, Hotels and other companyveniences in companynection with the property of the companypany d to carry on the business of Hotel Keepers, Tavern Keepers,licensed victuallers and refreshment purveyors , e to sell, improve, manage, develop, lease, mortgage, dispose of or otherwise deal with all or any part of the property of the companypany, whether movable or immovable, with power especially to sell and distribute or to permit to be sold and distributed wines, spirits, tobacco and other stores.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
On further hearing of the reference in the light of this supplementary statement of the case the High Court held that the companypany performed two distinct functions, namely, the carrying on of the business of racing and the carrying on of the club and that the first three items of Rs.
Private Boxes in the Members Enclosure are avilable to members on payment according to the number of chairs in the box.
51,777 and Rs.
75 Members of either class had also to pay an annual subscription of Rs.
23,635, Rs.
October 26.
30 of 1947 made by the Income tax Appellate Tribunal at the instance of the appellant under section 66 1 of the Income tax Act XI of 1922 .
The entire management of the companypany and the companytrol over its funds and property were left in the hands of a companymittee of nine Club Members elected as provided in the articles of association of the companypany.
Of the 9 trustees 6 were elected by the season ticket holders and the remaining by the Local Town Council.
1 1934 18 Tax Cas.
51,777 Use of private boxes by members Rs.
The Judgement of the Court was deli vered by DAS J. L B D 2SCI 5 a DAS J. This is an appeal, by special leave granted by this companyrt, from the judgment and order pronounced by the High Court of Judicature at Bombay on the 22nd March, 1950, on a reference I. T. Reference No.
499, I.L.R. 1940 Ear.
Under the companypanys articles of association that were in force during the accounting year, besides Honorary Stand Members, Visiting Members and Temporary Members there were two main categories of members, namely, the Club Members and Stand Members.
The number of Club Members was limited to 350, exclusive of four designated high dignitaries and the number of Stand, Members was liable to be limited by the companymittee at any time.
Club Members and Stand Members had to be elected by ballot by the companymittee.
The facts necessary to be stated for the purpose of disposing of the present appeal are these The Royal Western India Turf Club Ltd. hereinafter referred to as the company pany was incorporated in 1925 under the Indian Companies Act, 1913.
150 and a stand member had to pay an entrance fee of Rs.
The companypany claimed that in companyputing its total income, the following four items of receipts should be excluded Season admission tickets from members Rs.
The companypany received large sums of money on admission tickets from members as well as from number members besides other moneys on other accounts.
C. Setalvad, Attorney General for India G. N. Joshi, with him for the Commissioner of Income tax.
30 of 1947.
