WEALTH TAX ACT, 1957

Section 21AA

Wealth tax - Liability to wealth-tax - Social club with no business or commercial object - List of members not being a fluctuating body, but a fixed body as on date of liquidation and members entitled to equal share in the assets of club on winding up

WTO in case of Bangalore Club, i.e., assessee, held that number of members and date of dissolution were all uncertain and variable and, therefore, indeterminate, as a result of which the Club was liable to be taxed, under WT Act in view of section 21AA. Held: In order to be an AOP attracting section 21AA, it is necessary that persons band together with some business or commercial object in view in order to make income or profits. Assessee-Bangalore Club was a social club having objects to provide for its members, social, cultural, sporting, recreational and other facilities, and to promote comaraderie and fellowship among its members, etc., Thus, it was clear that persons who were banded together did not band together for any business purpose or commercil purpose in order to make income or profits. The Bangalore Club was an AOP and not the ceration, by a person who was otherwise assessable, of one among a large number of AOP without defining the shares of members so as to escape tax liability list of members not being a fluctuating body, but a fixed body as on date of liquidation and, therefore, assessee was not liable to wealth-tax.