In Brief
The Supreme Court held that the Bangalore Club, a social club established in 1868, is not liable to wealth tax under Section 21AA of the Wealth Tax Act. The Court ruled that Section 21AA applies only to associations of persons where members voluntarily combine for a business or profit-making purpose and have indeterminate shares. A social club providing recreational facilities for mutual benefit does not constitute such an association. Additionally, the Court found that even if the club were an association, members' shares are determinate under club rules, as liquidation rules provide equal distribution of surplus assets to all members, thereby excluding the club from Section 21AA's scope.
The lawyer headnote and full judgment text are available to registered users.