TMI Blog2002 (3) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... nasmuch as the shares of the members in the assessee-club are determinate. I find that the assessee-club has no share capital. I also find that the members of the club have share in the surplus on the winding up of the club. The relevant rule in the Rules-Book reads as under:-- "(3) (a) If an Extraordinary General Meeting under the Rule decides to wind up the affairs of the club, it shall appoint a Liquidator of Liquidators and fix his or their remuneration. The liquidation shall be conducted, as nearly as practicable, in accordance with the Indian Companies Act and any surplus assets remaining after all the liabilities have been discharged shall be shared equally by the members of the Club." The learned counsel for the assessee pleaded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve two aspects-(1) Right to share in the income of the association; and (2) Right to share in the assets or surplus at the time of winding up. These two are separate right stand they cannot be identical. This is evident from the language of section 21AA which refers to both these rights. The said provision reads as under- "21 AA. (1) Where assets chargeable to tax under this Act are held by a association of persons, other than a company or co-operative society or society registered under the Societies Registration Act, 1860 (21 of 860) or under any law corresponding to that Act in force in any part of India, and the individual shares of the members of the said Association in the income or assets or both of the said association on the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have a share in the income of the association because, as already mentioned, it uses the word 'as aforesaid' in this way, which can only mean an association of the type referred to in section 167B(1), that is, an association where the members have a share in the income of the association. The only difference is that section 167B(2) covers those associations where the shares of the members are determinate in contrast to the provisions of section 167B(1) which are restricted in application to the associations where the shares of the members are indeterminate. The common factor between section 167B(1) and section 167B(2) seems to be that they relate to associations where the members have a share in the income and not simply right in the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated bona fide by persons carrying on business or profession exclusively for the benefit of the persons employed in such business. The Board have been advised that cases where income received by the trustees on behalf of a recognised provident fund, approved superannuation fund and approved gratuity fund is governed by section 10(25) of the Income-tax Act, the question of their being charged to tax does not arise. So far as cases where income is receivable by the trustees on behalf of an unrecognised provident fund or an unapproved superannuation fund, gratuity fund, pension fund or any other fund created bona fide by a person carrying on a business or profession exclusively for the benefit of persons employed in such business or professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. 20. Before parting, I may note that the learned counsel for the assessee has relied upon, and referred to at various stages of hearing, to the following decisions-- (a) Chelmsford Club v. CIT [2000] 243 ITR 89 (SC) (b) CIT v. Bankipur Club Ltd. [1997] 226 ITR 97 (SC) (c) Rajpath Club v. CIT [1995] 211 ITR 379 (Guj.) (d) CIT v. West Godavari District Rice Millers Association [1984] 150 ITR 394 (AP) (e) CIT v. Merchant Navy Club [1974] 96 ITR 261 (AP) I have already referred to the ratio of the decision at (a) above, which has followed the decision at (b) above. None of the other decisions is apposite to or at least decisive of the grounds raised in these appeals, and so, I do not find it necessary to discuss the same. 21. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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