TMI Blog1931 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... 66 of the Income-tax Act (XI of 1922) has referred, for the opinion of the High Court, a question of law. He states that the question is as follows :- That it should have been held that Maharaj Bag Club was not liable to pay income-tax of any kind either on the immovable property of the club or on its income.1' This statement is not in the form of a question, nor does it, read by itself, indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited company, that it should be so applied and because income has hitherto been so applied. The Articles of Association give the members of the Company full power to dispose of the income in any way they choose; apparently they may even, if they choose, pay a dividend; the only result of such payment would be that the Association would cease to enjoy the exemption of privileges granted by sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Club, Simla v. The Crown 1 ITC 113 but the basis of this ruling is that the surplus of income over expenditure remained the property of the persons, from whom the income was derived. In the case of the Maharaj Bag Club, the majority of the persons, who provided the income, might be termed members of the Club, but were not members of the Company, whereas the excess of income over expenditure was, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted Service Club, Simla, was a society making quasi profit by dealing with its own members and retaining such profit to the members. 5. We, therefore, hold that the profits of the Maharaj Bag Club made during the year, to which this reference relates, were chargeable to income-tax under the provisions of section 4(3) of the Act. The assessee will pay the costs of this reference. Counsel's f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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