COMMISSIONER OF INCOME-TAX, BOMBAY CITY versus ROYAL WESTERN INDIA TURF CLUB LTD.

Citation: [1954] 1 S.C.R. 289 · Decided: 26-10-1953 · Supreme Court of India · Bench: M. PATANJALI SASTRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

J 
'1 
S.C.R. 
SUPREME COURT REPORTS 
289 
has been raised that in the community to which the 
parties belong there was any such well recognised 
practice or belief. 
The defendants in the written 
statement make no assertion about it. But on the 
other hand, the plaintiff in paragraph 12 of his plaint 
asserts that the--
" Institution of samadhi and ceremonies connected 
1953 
Saraswathi 
Ammal 
and Another 
v, 
Rajagapal 
Ammal. 
with it are not usual in the community to which the Jagannadhada• 
parties belong ". 
J. 
Indeed it may be assumed that such a practice is 
not likely to grow up amongst Hindus where crema-
tion and not burial of the dead is the normal practice, 
except probably as regards sannyasis and in certain 
dissident communities. We see no reason to think 
that the Madras decisions are erroneous in holding that 
perpetual dedication of property for worship at a tomh 
it; not valid amongst Hindus. 
We accordingly affirm the judgment of the High 
Court and dismiss the appeal but in the circumstances 
without costs. 
Appeal dismissed. 
Agent for the appellant: S. Subramanian. 
Agent for the respondent: M. S. I~. Aiyangar . 
., 
COMMISSIONER OF INCOME-TAX, 
BOMBAY CITY 
v. 
ROYAL WESTERN INDIA TURF CLUB LTD. 
[PATANJALI SASTRI C.J., s. R. DAS, VIVIAN BOSE, 
GHULAM HASAN and BHAGWATI JJ.] 
Income-tax Act (XI of 1922), s. 10(1), s: 10(6)-Race coitrse 
company-Receipts fron• members-Whether receipts from bnsiness 
-Assessability-Applicability of rule in Styles' case-Difference 
between mutital insitrance societies and clitbs, and race coitrse com-
panies-"Trade association", mean.inf} of. 
196J 
Oct. 26. 
290 
SUPREME COURT REPORTS 
[1954] 
19.13 
The assessee, the Royal Western India Turf Club Ltd., was 
--
formed inter a,lia for the purpose of carrying on the business of a 
Commissioner 01 race course company in all its branches and to establish clubs, 
Irwo1ne-tax, 
hotels and other conveniences in connection with the p1·operty of 
Bombay City 
the company. It had two classes of members, clU:b members, 
v. 
whose number "ras limited to 350 and stand members who were 
Royal TVestern elected by ballot. Every n1ember paid an entrance fee and an 
India Turf 
annual subscription. The liability of the members was liinited by 
Club Ltd. 
guarantee and if there was any surplus on winding up, it was to 
be paid to the members in equal shares. 
An admission fee v..'aB 
levied from the members for admission to the fifembers' Enclosure, 
and from non-members for admission to the other Enclosures, and 
in each Enclosure there was a totalisator. The moneys received 
from members as well as non-members were included in one pool 
and distributed ·a1nongst the holders of the winning tickets. In 
each Enclosure refresh1nents were supplied on payment. The 
company admitted that moneys realised from non-members were 
receipts from business and taxable, but contended that the follow-
ing items of receipts received from 1nemhers were not assessable 
to income.tax, viz., (1) season ad1nission tickets from members, 
(2) daily admission gate tickets from members, (3) use ·of private 
boxes by members, (4) income from entries and forfeits received 
from men1bers whose horses did not run. 
The High Court of 
Bombay held that items 1, 2 and 3 did not fall either under s. 10(1) 
or s. 10(6) of the Income-tax Act and were therefore not ta.xable, 
but item 4 fell withins. 10(1) and s. 10(6) and was taxable. 
The 
Commissioner of Income-tax appealed: 
Held, (i) that the principles of St-yle.•' case as explained by 
subsequent cases had no application to the Company as there was 
no mutual dealing be.tween the m~mbers inter se in the nature of 
mutua.l insurance and no contrib't.tion to a common fund put up 
for payn1ent of liabilities undertaken by each contributor to the 
other contributors, and no refund of surplus to the contributors, 
but on the other hand, the company realisod moneys both from the 
members and non-1nembers for the same consideration, namely, by 
the giving of the same or similar facilities to all alike in the course 
...of one and the same business carried on by it; 
"(ii) that, as the company was formed for carrying on a busi-
ness, it had dealings with its members also in the ordinary course 
of business, and gave the sa1ne or similar amenities to members 
and nori-members, and there were no mutual dealings between the 
members or a common fund for the discharge of common obliga-
tions to each other, the princ

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